1099-K (eBay) Reporting Questions on Short/Long Sales + No Sales Proof
Hello FreeTax Community,
Like others, I too have received a 1099-K from eBay this year, whereas in previous years I have not. I am not a person who uses eBay as my business but one who sells items here and there throughout the year. The previous year was abnormally strong for sales so I breached the $5,000 limit that triggers the 1099-K. Now I'm trying to figure out how to navigate it so that it doesn't trigger an audit.
As I work through inputting the 1099-K, which I am doing through through Income → Common Income → Investments and Savings → Personal Items (1099-K), I have found that the option that comes up is either a short or long term sales. Well, I have both. Some items I bought in 2023 and sold in 2024. Some I bought in 2001 and sold in 2024. FreeTaxUSA only allows you to choose either short or long. How am I to represent them both because choosing one or the other has drastic price fluctuations for how much I owe.
Also, some of the items I sold I purchased (or were gifted) many years ago and have no way to provide any proof of purchasing. How are these supposed to be represented when itemized out?
Thanks for anything you can provide!
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I'm in the same boat but with Depop. not sure what to do.
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Looks like we may be on our own!
I'm shocked nobody has chimed in as we cannot be the only people that have ever have been in this situation.
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Hello No_Late_Returns,
Sorry for the delay. Please keep in mind that the 1099-K is not an "official" income reporting form. It is a form required by the IRS for e-vendors to report to the IRS transactions sent to a seller or gig business. basically it is a reminder that you may need to report income to the IRS. On the Payee copy it says, " This is important tax information and is being furnished to the IRS. If you are required to file a return, a negligence penalty or other sanction may be imposed on you if taxable income results from this transaction and the IRS determines that it has not been reported."
It sounds like you already went through the 1099-K pages and read that you need to enter this by: Enter any personal property sold for a gain on the Your Investment and Savings Accounts screen.
When you enter sales there, enter them as a, "Stock or Investment Sale". You can enter more than one sale and that way you can enter the short-term (held less than one year) and long-term (held more than one year). Enter is as a Summary and you don't enter each individual sale, but a group of sales. Do you have some sort of spread sheet?
Also, keep in mind that if the cost was more than the sales price (sold at a loss), then you do not report those items, because you are NOT allowed to claim a capital loss on the sale of personal items.
if you have questions, you may want to reach out to Customer Support on your account. Consider adding Deluxe or Pro Support to do a live chat.
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Thank you, @MatthewD!
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