1099-K re: Concert Tickets (Personal, Not Business)
Hi,
I received a 1099-K from Paypal from selling some tickets on StubHub (several transactions totaling between ~$2k-3k). These were my personal use tickets that I ended up selling because I could no longer attend. I do not have a business doing this.
The 1099-K form shows the gross amount I received and does not take into account the amount I originally paid for them or the purchase price, which I need to account for in order to offset the amount on the 1099-K form.
I looked this up on the IRS website and it mentions accounting for the offsetting costs using Form 8949, Schedule D and/or Form 1040, Schedule 1 from what I understand; however, I do not see this option on the website when I am trying to file.
Can anyone provide any help here? How do I account for this? Where do I input this if it is not a business or stocks, etc or I cannot find the correct forms?
Thanks!
Comments
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Most personal transactions shouldn't show up on a 1099-K. They could if your third-party payment network can't distinguish between business and personal transactions or if you mistakenly used your business payment account for a personal transaction.
Personal transactions that could show up on a 1099-K include non-business transactions like gifts or splitting a dinner bill with friends. For example, if you used Venmo to split a restaurant bill with friends and accidently used your Venmo business account, that will show up on a 1099-K. Most personal transactions aren't taxable and shouldn't be reported on your 1099-K. You only need to report a personal transaction on your tax return if you sold personal property at a gain (for more than you bought it for).Did you sell the tickets for a gain? Let me know.
The company that issued your 1099-K should differentiate between business and personal amounts. However, if they don't, you'll need to request an updated 1099-K from them so you can report only business transactions on your return.
If the issuer of your 1099-K will not correct the form (I highly doubt Paypal will), you can report this in your account by going to Income > Business Income > 1099-K Income. At the bottom of that page, answer "yes" to the question asking, "Did you receive a 1099-K that's incorrect?" You can enter the amount that was incorrectly reported on your 1099-K on the following screens. -
Thanks so much for your response, Matthew.
Yes, I did sell 5 out of 6 transactions/pairs of tickets for a gain, though there is one personal refund showing on the 1099-K which is incorrect.
I think my issue is having bought them for personal use originally, not having a business, and not knowing where to input the info per the IRS' website about this type of situation and accounting for the offsetting costs/original purchase price from the amount received using Form 8949, Schedule D and/or Form 1040, Schedule 1.
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If that is the case, then you should report the transaction on the Stocks or Investments Sold page, so the sale shows up on the Form 8949 and Schedule D. When you do that, report the cost of the 5 tickets, date purchased, and the date sold and the proceeds. Check that the Basis was NOT reported to the IRS. You will have a small capital gain.
This would be the case for anything personal that one bought and sold for a profit. For example, if one had an old Nintendo purchased it for $10 at a garage sale and sold it for $100 on Etsy. Most people probably don't report personal items sold at a gain, but the catch in your case is it was reported on a 1099-K and you must account for it.
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Got it, thanks! In that case, when I go to that page, it asks "Did you receive a tax form or statement for this investment sale?" and asks, "tell us which tax form, if any, you received:
1099-B (or substitute statement)
1099-S
I didn't get a tax form"
Which would be the correct choice since it is a 1099-K form? -
You'll want to indicate that you didn't get a tax form. Making that selection won't tell the IRS that you didn't get a 1099-K. Rather, that question is only asked for the purposes of the software to help determine what prompts you receive on the following screens. If you were to choose Form 1099-B or 1099-S, then the subsequent screens will ask for information from those forms and will indicate in which box on the forms you will find the requested information. However, if you say that you didn't get a tax form, then you will simply be asked for information about the items you sold without reference to specific boxes on a form.
