1099K and Ebay ugh

Forum|Forum|4 years ago
March 31, 2022
9 replies
71 views

My client got hit bad with Ebay. She got a 1099K for $42,749 for selling things from her closet as well as

her friends, not knowing that this would be reported. I read somewhere is the beginning of this Ebay reporting mess, that if the items were bought at a higher price than what they were sold at, that she could claim at them at a loss. would that be at the reconciliation line 2 Less: adjustments: ?

Some of these items were years old, and she does not have receipts. They were older exercise equipment, maternity clothes, etc.

Any help is greatly appreciated. I do really thank you all for being patient with me

ProSeries Basic

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Best answer by BobKamman

Upon a closer reading, you may find that she is in the business of selling consignment items from her friends (Schedule C) as well as her own personal items for FMV that is less than original cost. One can either panic in these circumstances, running around like Chicken Little and screaming "the cloud is falling," or instead realize that IRS doesn't have the staff to open last month's mail, much less pester small-time online yard sales.

The 1099-K is one big bluff to make people think IRS cares enough to deal with the nuisance. But let's say she made $3,000 selling $30,000 for others, and the rest is just static. Those who play "Trick the Computer" will probably report all sales as gross receipts, for the sake of matching the 1099-K, and then subtract out the personal stuff as inventory valued at date of conversion from personal use. This is neither truthful nor accurate, but these days who cares?

dascpa

Level 11

That's a lot of stuff from her closet.

(1) She is not in the business of selling and (2) you cannot claim a loss on the sale of personal property. So report the sale and the exact sale amount as a cost of sale reflecting a -0- net profit.

BobKammanAnswer

Level 15

Upon a closer reading, you may find that she is in the business of selling consignment items from her friends (Schedule C) as well as her own personal items for FMV that is less than original cost. One can either panic in these circumstances, running around like Chicken Little and screaming "the cloud is falling," or instead realize that IRS doesn't have the staff to open last month's mail, much less pester small-time online yard sales.

The 1099-K is one big bluff to make people think IRS cares enough to deal with the nuisance. But let's say she made $3,000 selling $30,000 for others, and the rest is just static. Those who play "Trick the Computer" will probably report all sales as gross receipts, for the sake of matching the 1099-K, and then subtract out the personal stuff as inventory valued at date of conversion from personal use. This is neither truthful nor accurate, but these days who cares?

Y

YankeeGirlAuthor

Level 3

what she most likely did was sell her parents and in-laws things. she was their caregiver and unfortunately, they all (4) passed the year before from covid. so when she decided to sell some things, others asked "well... since you are doing this anyway, can you put this on for me?" So, it is a little of everything combined.