1099-K

[Boyer 2 Accountants]

Client received a 1099-K for the sale of sporting goods which he owned personally.  As I see it the only way to report, and avoid taxation, which is appropriate, is to file a Schedule C and report the gross proceeds as cost of goods sold.

Setting up the Schedule C is actually misleading as the taxpayer is not engaged in a trade or business.  

Have any users come up with another solution?

Thanks

[IRonMaN · Accepted solution]

I would go that route, but instead of cost of sales I probably would use one of the other expense lines and type in something like cost of personal items sold.

[Boyer 2 Accountants]

Thank you.

Keith

[IRonMaN]

You betcha!

[QueenBee110]

We sometimes use Sch D, describe the property as "personal goods" or something like that,  check the box for Personal Loss, and "not reported on 1099B".  That gets around the whole Sch C carrying forward issue and does not involve SE income or tax.

[Boyer 2 Accountants]

Thank you.  I'm not sure that treatment would prevent an IRS notice as I should think the 1099-K, and from the instructions I read, should be reported on a Schedule C, Schedule F or Schedule E.

We are going to file a Schedule C, reporting the amount on the 1099-K and then an "other expense", Fair Market Value of Personal Items Sold.

As for principal business or profession: On Line Sales of Personal Property.

this should work and not give an inkling that this is a continuing business operation.

Keith