1099

[sunshinequest]

I received a 1099 with almost 13k that I never receive from Ebay.  1. Monies were being held by eBay for AN ITEM authentication, and it did not. Money was returned by eBay to buyer.  2. a table that broke and the buyer withdrew the purchase.  I never saw any money only charges for the eBay services.  However, it shows as income on the 1099.  I called on 2nd person in the tax department??  I asked to speak to a supervisor and was told you deal with it and your accountant.  Why should I have to pay an accountant for money I never got? You cannot 1099 someone with money that was never paid. Please explain why I have to show IRS I did not get this money and why could I not speak to a supervisor. Help!

[eastlaneave · Accepted solution]

@sunshinequest 

Here is a  1099-K Guide. It shows how all the numbers are generated:

https://www.ebay.com/mes/taxguide

From there you can download a details report which will document the refunds.

When you file your tax return, you will (usually) file a Sch C and list the income from the 1099 and then deduct the refunds and various expenses.

[mr_lincoln]

Hi @sunshinequest 

Was part of the money returned to the Buyer the 14K 2.39 CTW Diamond Ring with Fancy Dark Blue Center that sold for over $ 10,000?  Was the item returned to you from the authentication center?  

The amount eBay returned to the Buyer would be a Refund amount you would use on the IRS Schedule C to offset the sold amount and reduce your taxable income.

Download an IRS Schedule C with instructions and read about what you can deduct to reduce the taxable income for 2024.

[sunshinequest]

I did not refund any monies, as I never received them.  Ebay had the money; one refund and one withdrew.  If you worked for me and I 1099 you for money I never sent you, would

that be correct?

[mr_lincoln]

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@sunshinequest wrote:

I did not refund any monies, as I never received them.  Ebay had the money; one refund and one withdrew.  If you worked for me and I 1099 you for money I never sent you, would

that be correct?

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@sunshinequest 

It was recorded as a sale, otherwise you would not have shipped it.  Yes, the money was on hold during the authentication process (and I assume subsequent return to you) and per eBay's policy on payments on hold for 30 days for sales over $ 1,000.   What I explained is that to offset that amount you list it as a refund on your tax return.  

[sunshinequest]

Yes, the item was returned to me. So far all was handled properly.  However, what taxable income? Money was never sent from eBay to me- the seller.   If this is allowed, then people would have to pay a CPA for monies they never received.  A gross income from a sale that could had been.

[mr_lincoln]

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@sunshinequest wrote:

Yes, the item was returned to me. So far all was handled properly.  However, what taxable income? Money was never sent from eBay to me- the seller.   If this is allowed, then people would have to pay a CPA for monies they never received.  A gross income from a sale that could had been.

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@sunshinequest 

If the 1099K INCLUDES the amount of the sale, regardless of whether or not you received the money, than I am explaining to you how to use the amount as a Refund value to offset the sold amount included on the 1099K.  That is how a CPA would tell you to handle it.

Please download the IRS schedule C with instructions as mentioned, I do my own and send it to my account with our other personal tax information for tax prep.  How you handle your tax return is your decision.  If the form is too complicated to figure out then I suggest using an accountant to help you.