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1099-K payments for personal property sold at a loss

Forum|Forum|1 month ago
May 8, 2026
3 replies
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TP had no income in 2025 other than income reported on Form 1099-K from eBay for the sale of personal items sold at a loss.

I read a post regarding this but the discussion is locked and there was no solution.

The 1099-K income should be reported on Schedule 1, Part 1, line 8z and a corresponding amount to offset the 1099-K income should be reported on Schedule 1, Part II, line 24z. However, there is no option to enter anything on line 24z.

There is an option at the bottom of the Form 1099-K Wks in the 1099-K Reconciliation section to check a box on line 2b to indicate that the payments were for personal property sold at a loss. I thought by checking this box, the offsetting adjustment would be carried to Schedule 1, Part II, line 24z. However, it appears that it zeroes out the income amount reported on Schedule I, Part 1, line 8z.

After checking the personal property sold at a loss box on the 1099-K Wks, I get an error saying the return can't be e-filed since there is no income.

Surely, I'm not the only one who is dealing with this issue. What do I need to do to report this the way the IRS wants - income on Sch 1 line 8z and an offsetting amount on Sch 1 line 24z and be able to e-file the return?

Thank you.

ProSeries Professional

Best answer by TaxGuyBill

@david3 wrote:

The 1099-K income should be reported on Schedule 1, Part 1, line 8z and a corresponding amount to offset the 1099-K income should be reported on Schedule 1, Part II, line 24z.

I'm curious why you think it should be reported that way. There is a line near the very top of Schedule 1 specifically for that situation.

https://www.irs.gov/instructions/i1040gi#en_US_2025_publink1000158471

Is that the taxpayer's only income? I suspect they may have received $0.51 from their bank, or perhaps found $0.51 on the sidewalk, and need to report that as taxable income. 😁

IRonMaN

Level 15

In other income, add a line with a description of something like "income reported to allow e-filing" and then report a dollar of income on that line of the return.

Slava Ukraini!

BobKamman

Level 15

I avoid jumping through all these hoops and charge my clients less because I just have to check a box and enter an amount at the top of Schedule !. My sympathy for your lost time. Do you really have to fill out the 1099-K worksheet? If he has no income, why are you filing anyway? (OK, to prevent an IRS notice. Or maybe get a state refundable credit.)

E-File FAQ

Am I allowed to make up numbers on a 1040 and then sign it under penalty of perjury, if the purpose is to get past an IRS rule?

Yes, that is allowed. We are not concerned about accuracy, we just want to fit the square peg into a round hole.

T

TaxGuyBillAnswer

Level 15

@david3 wrote:

The 1099-K income should be reported on Schedule 1, Part 1, line 8z and a corresponding amount to offset the 1099-K income should be reported on Schedule 1, Part II, line 24z.

I'm curious why you think it should be reported that way. There is a line near the very top of Schedule 1 specifically for that situation.

https://www.irs.gov/instructions/i1040gi#en_US_2025_publink1000158471

Is that the taxpayer's only income? I suspect they may have received $0.51 from their bank, or perhaps found $0.51 on the sidewalk, and need to report that as taxable income. 😁

D

david3Author

Level 7

Thank you.

I googled on how to handle this situation and line 8z and line 24z were explained as to how to report this situation. Interesting that your link didn't appear in my google search or in PS instructions.

sjrcpa

Level 15

You found the "old" instructions. For years before the line was added.

The more I know the more I don’t know.

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