eBay 1099-K – How to enter 8949 Adjustments to Gain?

hit_4_show
hit_4_show Member Posts: 5 Newcomer
in Filing my taxes

I entered my eBay 1099-K as follows.

Income -> Your Investment and Savings Accounts -> Add Another Investment -> Personal Items (1099-K) -> Summary ->

Selected “Long Term” . Entered 1a (Gross amount) in Sales Proceeds. Entered Cost Basis (sum).

Save and Continue -> Continue ->

Then I attached my 8949 additional statement for the eBay 1099-K, which has significant adjustments to gain to account for fees, refunds, and shipping.

This is apparently not the correct route to take as I was never provided an opportunity to enter the adjustments anywhere in FreeTaxUSA, so the software can move the sum of all my individual eBay transaction adjustments to the 8949 Part II column (g) cell for the eBay 1099-K entry.

How do I enter the eBay 1099-K in a manner that allows for the adjustments to be reflected on Form 8949, and therefore on Schedule D in column (g) adjustments? As of now, my Net Long-Term capital gain on Schedule D is incorrect (too high) because the gain adjustment for all my eBay transactions is not entered.

Thank you.

Comments

  • hit_4_show
    hit_4_show Member Posts: 5 Newcomer

    I will answer my own question. Do not enter as if it is a 1099-K. Enter it as if it is a 1099-B, following the prompts for a stock or mutual fund sale. Then, while still summarizing, you can enter the summed cost basis and summed adjustment to gain. The gain adjustment is achieved by indicating there are sale (stock) fees or expenses. Enter the gain adjustment. Upload the pdf statement with all the individual transactions when prompted. Once complete, you can preview Schedule D and Form 8949. My review of the preview showed Form 8949 and Schedule D were correct, with the appropriate Proceeds; Cost basis; Adjustment codes “EM”; and Amount of adjustment for the eBay 1099 entry on 8949. The information was properly carried from the 8949 to Schedule D.

  • MatthewD
    MatthewD FreeTaxUSA Team Posts: 557

    Hi Hit_4_show,

    Was this for the sale of personal items at a gain? I never really understood the context of why enter the income reported on a 1099-K as an investment sale.

  • hit_4_show
    hit_4_show Member Posts: 5 Newcomer

    Gain: yes, at least as best as I can document item basis. Lots of personal items, acquired over decades from various sources at widely varying costs relative to FMV at time of original acquisition. No documentation, **** history, etc to substantiate basis for most items. So, set basis to $0 on most.

    The IRS provides quite specific advice/instructions, through its website, on how to handle 1099-K’s generated from online payment platform transactions, though it took me a long time to find all the relevant information and understand it.

    I entered as an “investment gain”, specifically stock/mutual fund sale route, in the context of FreeTaxUSA, to simply get the correct numbers to the correct cells on specific IRS tax forms, as required by the previous IRS advice/instructions. Specifically, Form 8949 and Schedule D. I do not know of there are other routes to take during the FreeTaxUSA “interview” to get the correct numbers to Form8949 and Schedule D. I hated claiming any capital gains on personal item sales, but that appeared to be the safest option given my specific circumstances. This is especially so as I am confident there was actually a loss on many of the items; albeit with no proof.

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