1099-k where to report?

[lloydsteventaylor]

if you are a sole prop. goes on schedule C . a partnership-Form 1065. a corp on 1120 or 1120s. now to my question :

seller news gave us this example: 

 Many sales on eBay aren’t taxable, so if your sales are over the $600 threshold it doesn’t necessarily mean you will be taxed on those sales. Only goods that are sold for a profit are considered taxable, so you won’t owe any taxes on something you sell for less than what you paid for it. For example, if you bought a bike for $1,000 a few years ago, and then sold it on eBay today for $700, that $700 you made generally would not be subject to income tax.

lets keep it simple with the bike as our only transaction. you get a 1099-k for $700. where does it go? you are not a business and not a hobby. should it go on schedule d as a capital loss?

see the irs : https://www.irs.gov/businesses/understanding-your-form-1099-k

they just talk about businesses here. 

How did you report this kind of transaction  in 2020 if you got a 1099-k? 

[heckofagame]

Talk to an accountant

[divwido]

A 1065 is a partnership, so no.  You would start on Schedule C, if whatever you are using has not already asked for the data.

[caldreamer]

According to my CPA selling on EBAY is a business (even if you consider it a hobby).   You must report all income (gross sales) and then you can deduct business expenses (mileage, cost of goods, packaging supplies) etc.

I suggest you consult a tax professional (until you have a better understanding of what is expected of you).

[nobody*s_perfect]

" Many sales on eBay aren’t taxable, so if your sales are over the $600 threshold it doesn’t necessarily mean you will be taxed on those sales. Only goods that are sold for a profit are considered taxable"

That's certainly not consistent with the info that I've read on the IRS pages. Do you have a link to an IRS page that says this?

[lloydsteventaylor]

That was a direct quote from a seller news post just today.

[nobody*s_perfect]

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@caldreamer wrote:

According to my CPA selling on EBAY is a business (even if you consider it a hobby). ....

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Has he read this page from the IRS, which lists 9 criteria that  what they consider when determining whether an activity is a business or a hobby? Probably you meet most or all of the criteria, but many eBay sellers do not.

https://www.irs.gov/faqs/small-business-self-employed-other-business/income-expenses/income-expenses

[eleanor*rigby]

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@nobody*s_perfect wrote:

" Many sales on eBay aren’t taxable, so if your sales are over the $600 threshold it doesn’t necessarily mean you will be taxed on those sales. Only goods that are sold for a profit are considered taxable"

That's certainly not consistent with the info that I've read on the IRS pages. Do you have a link to an IRS page that says this?

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It's a direct quote from the announcement from eBay today. 

A big change to federal tax reporting laws that will affect small-scale sellers 

As you stated on another thread, "I'm certainly not going to rely on eBay to provide tax advice. They can barely explain their own policies."

Sound advice.

[mudshark61369]

@nobody*s_perfect,

Using the $1,000 bike that sold for $700 example, if you do not have the receipt for it showing the $300 loss, you are SOL in terms of the IRS believing that.   If you sell vintage or antique items that there is no receipt for you could be paying capitol gains tax rates on the sale(s) That law does not only apply to property or investments, it applies to any thing they consider to have increased in value while it was held. 

[dbfolks166mt]

Agreed. You can also write off the loss if you come out in the hole once all is said and done. Although there are limits to how long you can do that. 

      The Internal Revenue Service allows you to take a tax deduction for legitimate losses incurred in the operation of your business. However, if your business claims a net loss for too many years, or fails to meet other requirements, the IRS may classify it as a hobby, which would prevent you from claiming a loss related to the business. If the IRS classifies your business as a hobby, you'll have to prove that you had a valid profit motive if you want to claim those deductions.

     However, if your business claims a net loss for too many years, or fails to meet other requirements, the IRS may classify it as a hobby, which would prevent you from claiming a loss related to the business. If the IRS classifies your business as a hobby, you'll have to prove that you had a valid profit motive if you want to claim those deductions.

[7606dennis]

The recommendation to talk to an accountant is a good one.