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1099-K

Laaccy1
Level 1

I have a client who is a college student.  For various reasons, she sold a lot of her clothing.  They paid her through PayPal.  How do I handle this?  It wasn't a business.  It was nothing more than an on-line yard sale.

 

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dascpa
Level 8

We are seeing this issue more and more.  If the person was not in the business of selling clothing, and was not selling personal property at a profit then I personally would create a Schedule C to record the revenue from the 1099-K and then an offsetting expense to exactly match it.  Whether you call it purchases or something else is up to you.  This way the IRS matching program will match exactly the 1099-K and you're creating a -0- profit report.  Anybody else have a different opinion?  

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dkh
Level 11

If it was my client - I would enter the 1099K to Other Income   and then also enter the same $ negative  on the Other Income Statement Line 24   with an explanation    such as  "removing income for sale of personal wardrobe items"           

Of course  I don't know what $$ amount you are working with.  

dascpa
Level 8

We are seeing this issue more and more.  If the person was not in the business of selling clothing, and was not selling personal property at a profit then I personally would create a Schedule C to record the revenue from the 1099-K and then an offsetting expense to exactly match it.  Whether you call it purchases or something else is up to you.  This way the IRS matching program will match exactly the 1099-K and you're creating a -0- profit report.  Anybody else have a different opinion?  

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