1099-K form sent in error by ebay

[lindaevelyn]

Ebay sent me a 1099-K form for 2021 tax year.  However, my sales were below $6000.00 and my number of transactions below 127!  So in no way would I qualify under the limits set for the year 2021 which was $20,000 and 200 transactions!  Looks like someone at Ebay made a big mistake and applied the new limit of $600 to 2021 sales and didn't bother to wait until this year, 2022 when they take effect!  This would mean I would have to report this to IRS on my tax return this year and pay a combined tax on it of 30% that I shouldn't have to, but under the law, I am duty bound to report any income that a filer reports to the IRS under form 1099K!  I wonder how many other people this has happened to?  How will ebay correct this?  Will they pay the tax I owed since it is their mistake?  I have contacted them and all they say is yes, this happened, especially in California, and they would fix it.  But when??? I need to file my taxes and still have hear nothing from ebay.  Everyone - if you got a 1099-K make sure you really were supposed to!!

[chicago_wabo]

I received one as well and mine is even worse.  They have me down for a sale in June of 2021 of $3,697.59, but that sale was cancelled and the money refunded.  It even shows that on the Financial Statement I downloaded from ebay's website.  On a separate topic, ebay claims the amounts on this 1099-K as the amount of money you made, but they know nothing as far as how much money the product cost you in the first place.  Does anyone know how to deduct what basically is your "cost basis"?  Thanks in advance for any help with this screw up.  

[electromechanix151]

I agree and had the same issue. Ebay doesn't have a way to contact without talking to a person and they just are not knowledgable enough. I got a 1099k which showed an incorrect amount of transactions that put me over the threshold. 

[nobody*s_perfect]

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@chicago_wabo wrote: ....  They have me down for a sale in June of 2021 of $3,697.59, but that sale was cancelled and the money refunded...  

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The 1099-K represents all of the funds that eBay processed for you, i.e., the total that buyers paid for item price, shipping, and handling.  The refund amount is a deductible expense that you enter on your Schedule C.

https://www.ebay.com/help/selling/fees-credits-invoices/ebay-form-1099k?id=4794

For information about deducting expenses such as refunds, eBay fees, shipping, COGS (Cost of goods sold) etc., take a look at IRS Schedule C and its instructions.

[mybusybee]

It happened to me as well. I don't trust ebay and although they say these forms were no sent to the IRS I am sure they were. What a bummer. I used to love EBAY but their policies and service have declined rapidly in the last year or two especially for sellers

[roddickr]

I received a 1099 K as well with only $1500 in sales. I am assuming this is a mistake as well? 

[nobody*s_perfect]

It's not a mistake if you're in one of several states that already have set lower thresholds. Here's a partial list:

https://community.ebay.com/t5/Payments/Form-1099-K-Detailed-Report/m-p/31575590#M106915

[jollyleafman]

I just got a 1099-K form in the mail today and I'm super frustrated.  One, I checked the tax rules earlier last year (2021) and Ebay's own rules say a 1099K is only generated for sellers with total sales over $20,000 for 2021, or over 200 transactions in 2021.  My account hit neither of those in 2021.  Additionally, I'm not a business.  I'm just a guy selling old stuff I originally bought for personal uses.  But I have tax prep experience and 99% of the time a 1099-K form is generated, it's reported to the IRS the same time your form is generated, and especially if it was mailed!  IRS will be expecting me to report this as income now on my tax return and my god, it's not income.  If they really want to get **bleep**, I would register a loss after shipping and cost of goods sold.  But boo, I don't have the receipts for the items, because again, these are old items from my house I no longer use.  Really curious to see what Ebay does about this mess...  This is a big issue.  

[nobody*s_perfect]

If you click on the link in the post just before yours, you'll see a memo that eBay sent last February with a list of states which have set thresholds much lower than the federal level.  Illinois has set the threshold at $1,000, which is why eBay sent you a 1099-K.

[aprp_us_btvuwoub]

Happened to me also. This is complete crap!!

[markski1i8dda]

I received a similar and still waiting or reply from eBay 

[dbfolks166mt]

     I believe you are in Virginia which has two parts to their state 1099 reporting requirements. The dollar threshold is $600 but the number of transactions is set at 0. So while you may be under the $600 threshold you had at least 1 transaction so you received the 1099. 

[nobody*s_perfect]

The threshold in Virginia is $600, so eBay sends a 1099-K to any seller based in VA who passes that threshold.

Here's a memo that eBay sent out last year, listing the states that have thresholds lower than the federal level. A couple more have been added since the memo was sent:

https://community.ebay.com/t5/Payments/Form-1099-K-Detailed-Report/m-p/31575590#M106915

[dbfolks166mt]

     I am not sure how eBay is interpreting the Virginia law with regards to the number of transactions. It is possible that while you have not met the $ threshold for reporting you did have one or more transactions so they issued you the 1099. It would be an interesting question that I am sure the Virginia IRS could answer. 

[nobody*s_perfect]

If Virginia law required that a 1099-K must be sent for every account that had one transaction, there would be no need to specify a dollar threshold. Logically, the absence of a number for transactions means that the 1099-K is required if there was more than $600 regardless of the number of transactions.

[fashion-vibes]

Hi I hope you can help me .I received the email as well to disregard the incorrect 1099-k. I'm confused a bit as I'm over the transaction threshold my transactions were 220 and gross sales I'm under 20k I made 7K. Because I'm over the transaction threshold should I presume this 1099 k was indeed furnished to the IRS? And take my mailed copy to my accountant?