1099 k expenses

[corinne91]

CAN USE SOME EXPERTISE IN THIS.  CLIENT RECEIVED A 1099-K FROM PAY PAL FOR $1200. HE CLAIMS HE PAID $900. FOR ITEMS AND THIS IS JUST A HOBBY NO  BUSINESS. HOW DO I REPORT HIS $300 GAIN. THANK YOU SO MUCH

[Just-Lisa-Now-]

have you reviewed the reporting options right on the 1099K worksheet?

[corinne91]

This is so new to me, the only thing i see is the 1099k- reconciliation  if I am to guess I am assuming on line b i put down the amount of money he lost?

thank you so much 

[dascpa]

Your "wording" may be really important.

Can you offset Paypal income with expenses incurred to generate that income - in most cases yes.

However, you stated this vneture is a "hobby". Now you need to review the hobby rules and how hobby income is reported. Based on current rules you would not be able to deduct any expenses.

[corinne91]

I appreciate you taking the time to reply however now I am totally confused.

client only does this pay pal very little and he stated that he paid $900 some dollars and sold it for over $1000.00 means he had a profit.  do you know how to report this?

Thank you

[sjrcpa]

irs.gov has guidance.

It is probably a capital gain for Sch D/8949.

[Just-Lisa-Now-]

Sch D, Asset Entry Worksheet, just like a stock sale.

[corinne91]

good morning

not really the more i try to figure it out the more confused I get any suggestions?

Thank you again

[sjrcpa]

What's so hard about entering it the same way you would a non 1099-B stock sale?

[TaxGuyBill]

They are suggesting to open the 1099-B/DA worksheet.

Then enter the sale on either the "Transaction Entry Table" *or* the "Quick Entry Table" (and check the box to transfer it to the other table).