1099-K

[marybeth_0]

does anyone else know how to file this form with their taxes?  I have never received one of these form 1099-Ks before in the past when I sold items on eBay.

[mega-ma-roo]

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@marybeth_0 wrote:

does anyone else know how to file this form with their taxes?  I have never received one of these form 1099-Ks before in the past when I sold items on eBay.

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The answer to this can be complicated and is best answered by a tax professional. For your own knowledge, you can start here: Gig Economy Tax Center | Internal Revenue Service (irs.gov)

For more information on filing see here: About Schedule C (Form 1040), Profit or Loss from Business (Sole Proprietorship) | Internal Revenue ...

[marybeth_0]

I sold the items for less than their value.  do you know what form I can file for this?

[mega-ma-roo]

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@marybeth_0 wrote:

I sold the items for less than their value.  do you know what form I can file for this?

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As I said, this is a complicated question and you really should consult a professional tax preparer about your situation.

The form I referenced above, Schedule C, is used to report profit or loss from a business. The question is, are you operating as a business or a hobby? There are several guidelines the IRS uses to determine if you are operating as a business:

IR-2007-90 (irs.gov) (Note: the information here on hobby income is no longer correct)

"In order to make this determination, taxpayers should consider the following factors:
š Does the time and effort put into the activity indicate an intention to make a profit?
š Does the taxpayer depend on income from the activity?
š If there are losses, are they due to circumstances beyond the taxpayer’s control or did they
occur in the start-up phase of the business?
š Has the taxpayer changed methods of operation to improve profitability?
š Does the taxpayer or his/her advisors have the knowledge needed to carry on the activity
as a successful business?
š Has the taxpayer made a profit in similar activities in the past?
š Does the activity make a profit in some years?
š Can the taxpayer expect to make a profit in the future from the appreciation of assets used
in the activity?"

If you are operating as a hobby, you cannot use Schedule C, cannot deduct expenses, and must report the full amount received as income. 

I am not a tax professional, so please do yourself a favor and contact a professional about your tax situation.

[wooden_flower]

In addition to business and hobby, there is also selling personal items.  Generally that would be recorded on schedule D for capital gains. But - schedule D has become very complicated. 

I think a tax preparer might suggest recording the 1099k amount as other income, then deducting the same amount as an adjustment to income.  You can't record a loss so after documenting that you made 0, he would deduct the same amount as an adjustment.

I am not a tax professional - like others here I can not offer advice.  I only mention this to show that there are a number of ways that sales proceeds can be treated when you are not a business.