Monthly Chat - February 8th at 1:00 pm PST

[devon@ebay]

Come chat with the TaxAct team to discuss how the IRS’ recent 1099-K Decision Impacts eBay Sellers this Tax Season. Get all of your questions ready for the team, so we can make the most out of this month's chat on February 8th at 1:00 pm PT!

Thanks for joining us for the Monthly Chat with eBay Staff and the TaxAct Team.

The chat thread will remain open until 2 PM PT at which point we'll close it from additional responses. After that time, we'll continue to work on responding to any queries that might still be unanswered.

To post your question, click Reply in the lower right corner of this post, type your question, and hit submit between 1-2 PM Pacific Time. The format of our chat mirrors the format of our Community Discussion Boards, where each post will appear in the thread chronologically. The taxAct and Community Team will review each question as it comes in, and will quote the original question in our reply. This quote and the reply will appear later in the thread, so just keep scrolling down to see our answers.

As a reminder, we want TaxAct to be able to get to as many members as possible during the allotted hour, so we have a few things to ask of you:

• Keep on topic
• Scroll through the list of questions to see what has already been asked to decrease chances of redundancy 
• Keep the message/question simple and no more than one to two items. If you include multiple questions in a post, please be aware that they may not be addressed during the chat and (specialist name) will do their best to follow-up with it after the chat has closed 

Missed the chat? Send your questions to the podcast by calling 888-723-4630 or email us at podcast@ebay.com and maybe your questions will make it on the air! Or listen to past episodes while you wait for next month!”

[mam98031]

@grepdogg 

You are welcome anytime to come to the Mentor's board and ask us questions as you need to.  Below is a link to where you can ask questions as they come up for you.

Ask a Mentor - The eBay Community

[tax_act]

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@shipscript wrote:

Hi Mark, I'm not sure if this is under your purview, but many eBay sellers who are LLCs or Sole Proprietors are getting 1099-K reports under their SSN instead of under the EIN that they provided eBay. Is there any tax consequence to this? We are advising these sellers to request a revision from the SSN to the proffered EIN. Is that necessary?

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Hi @shipscript - Thank you for reaching out.  I do not believe you are required to get a new 1099-K issued in this situation.  When you file a Schedule C with the IRS, your social security number will be reported on both the Form 1040 and Schedule C.  So, you should not see an issue where the IRS mistakens your 1099-K between your business form (Schedule C) and personal return (Form 1040).

[babclassics]

There has been a controversy in last several days about use of EIN on the 1099-K.  Ebay apparently is refusing to put EIN on 1099-K even for sellers that are LLC and do NOT file on their personal return.  The back and forth and (closed) tickets with eBay on this matter has been inconsistent.

Back when I signed up there was no difference between sole proprietor and LLC they were all lumped together in a single category and all people who entered EIN and business name got their 1099-K accordingly.

Well.. recently eBay CHANGED the sign up process and now when you create a new account you are lead down different paths for Sole Priority versus LLC and a choice is offered during registration to use EIN if appropriate for your LLC.   

But.... people who had /have the old combined Sole P / LLC designation on their account are stuck and can NOT get a 1099-K with EIN.  In my opinion this is a missed factor in migration when the taxation categories changed.

So... the only way I can see to get LLC EIN on 1099-K is to create a brand new account re-register with the NEW LLC path that allows EIN.  We are not being allowed to change over if we are stuck with the old combined Sole P /LLC showing on our business information page.

The IRS guidelines are being mis-quoted by agents.  The rules are clear to me that and EIN should be allowed for some LLCs and only the business owner know how they file.

Please fill in the blanks and tell me where I am wrong?  Several people on these boards are stuck and agents ae refusing to allow EIN on their account.

[shipscript]

Mark, many sellers on eBay are simply liquidating closets and garages to make ends meet. They are not operating like a business and are very unfamiliar with the kind of expense accounting required by sellers making a profit. What advice can we give them? If they are filing their own returns, can they use the 1040 EZ or are they now required to file the full form and schedules?

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Edit: A reply to your question can be found here.

[packrat2k]

Followup on your statement about deducting capital losses -- what I'm selling are garage sale type items: books, collectibles, old computer parts -- so would these be classified as personal-use items and so not deductible?

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Edit: A reply to your question can be found here.

[photobrow]

I have 3 business accounts registered for a Corporation S. I received incorrect 1099K forms on two of them. They show my name and SSN instead of the business name. The third one is correct. I called eBay several times. Please don’t tell me IRS required eBay to do this on my two accounts while the third one was treated as a corporation, just like last few years. 
Please fix this error and don’t mislead sellers with made up answers that don’t make sense. 

thank you!

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Edit: A reply to your question can be found here.

[mam98031]

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@clarkphilatelics wrote:

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@mam98031 wrote:

Some questions aren't TaxAct related but Ebay report questions.  Is TaxAct going to respond to the Ebay report questions too?

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How can a program like TaxAct be of use if eBay does not present data in a useable form?

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I'm unsure how to respond to that as I find the Ebay transaction reports under the Payment tab in the Seller Hub to work.  I drop it into Excel and redesign it in the way that I like to use the information.  All of the info is there.

devon@ebay 

There is one problem that has been true since the day Ebay has given us the Transaction reports for MP.  The way they have coded the date column does not translate well at all.  For example when you drop the worksheet into Excel, you can not sort by the date because it is coded in some way that prevents that.  It will return in what seems to be a random order.  I have always had to insert a column and type in the date myself so I can sort successfully.  The Reports team needs to review what they have done to that specific data to cause this issue.

[packrat2k]

Should column H on the 8949 be 0 for any item sold at a loss, so that when the column is totaled it shows just the gains?  Which is all the IRS cares about for a non-business.  

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Edit: A reply to your question can be found here.

[mam98031]

@babclassics 

Just some added info for you.  Many Sole Proprietorships use EINs.  They can get one if they apply for it with the IRS.

[clarkphilatelics]

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@packrat2k wrote:

Followup on your statement about deducting capital losses -- what I'm selling are garage sale type items: books, collectibles, old computer parts -- so would these be classified as personal-use items and so not deductible?

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I sell collectibles as a business. It is my understanding that losses on sale of collectibles by hobbyists are not deductible. Will some eBay sellers operating as business be regarded as hobbyists by the IRS? When is filing Schedule C not enough? What is the role of profitability?

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Edit: A reply can be found here. 

[decal_universe_inc]

My account is set up on eBay as registered business account with business name & EIN (as it has been for the past 7+/- years). 

In past years my 1099's have been correctly issued to my business name & EIN. 

For 2022 I have received a 1099 filed to personal name and SSN (this is incorrect). 

I have to file my taxes for my business using forms with business name & EIN (NOT personal name & SSN). 

I have read posts from other some other sellers on eBay that are saying that this same thing has happened to them, and was previously acknowledged by eBay as a "technical issue". 

I contacted eBay CS, and was told that the mistake would be fixed, and I would be re-issued a corrected form, however as of about 10 days later I am still waiting for the correct form to be uploaded to my account.

Is this issue being corrected? With revised forms sent to sellers with registered business accounts?

Thanks for your time

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Edit: A reply to your question can be found here.

[tax_act]

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@clarkphilatelics wrote:

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@mam98031 wrote:

Some questions aren't TaxAct related but Ebay report questions.  Is TaxAct going to respond to the Ebay report questions too?

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How can a program like TaxAct be of use if eBay does not present data in a useable form?

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Hi @clarkphilatelics - TaxAct provides easy to answer questions to report your income whether or not you actually received a Form 1099-K.  If you believe there is an issue with how the Form 1099-K is reported, TaxAct will walk you through the most important entries needed from that Form 1099-K and pull those details to the proper location on your tax return.

[mam98031]

A question I see more times than I can count in the Community is in regards to sellers that sell their personal stuff.  The big question is how do they value that item if they did not keep the receipt?  Do they need to depreciate the item if they do have proof of the original cost?

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Edit: A reply to your question can be found here.

[tax_act]

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@shipscript wrote:

Mark, many sellers on eBay are simply liquidating closets and garages to make ends meet. They are not operating like a business and are very unfamiliar with the kind of expense accounting required by sellers making a profit. What advice can we give them? If they are filing their own returns, can they use the 1040 EZ or are they now required to file the full form and schedules?

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@shipscript - Thank you for your question and Yes, this can be difficult to understand and report on your tax return.  This type of property being sold would be considered personal property.  If you sold personal property at a loss and did not receive a Form 1099-K, you do not need to work about reporting this on your tax return.  For instance, you bought a couch for $1,500 5 years ago and sold it for $1,000 in 2022.  You have a personal property loss of $500 that is not deductible on your tax return.  If you did receive a Form 1099-K for this transaction, you must enter the income on Schedule 1 and the same exact amount as a deduction on Schedule 1.  This will show the amounts properly to the IRS when they receive a Form 1099-K.  Unfortunately, Form 1040-EZ no longer exists and a Form 1040 must be filed in this situation.

[tax_act]

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@packrat2k wrote:

Followup on your statement about deducting capital losses -- what I'm selling are garage sale type items: books, collectibles, old computer parts -- so would these be classified as personal-use items and so not deductible?

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Hello @packrat2k - Based on the question, it sounds like personal property vs capital assets.  Losses from the sale of personal property do not need to be reported unless you received a Form 1099-K.  Personal property gains will be reported on Schedule 1.