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got my PayPal 1099 /// what now?

I assume I owe income tax on any profit I made selling an item, which is probably a loss on most things. Which means I have to show what I paid for the item.

Anybody have any idea on how to go about this. Some things I sold in 2024 I bought over 20 years ago so no way I have proof of purchase. Example.. I sold my 20+ year old Avantgarde Duos for $7K that I paid $10K for.

PLEASE don’t turn this into a PayPal bashing fest or start preaching about the IRS or tell me how stupid I was to use PayPal.

 I am only interested in ideas on dealing with the tax implications

 

thanks

herman

Showing 3 responses by carlsbad2

carlsbad2's avatar
carlsbad2
2,036 posts
 

@ozzy A copy of the 1099 goes to the IRS.  I would file an amended return, othersize the IRS will have $7k of unresolved income and you will get a letter.  Jerry

carlsbad2's avatar
carlsbad2
2,036 posts
 

I found the IRS guidance on how to file this 1099-K.  Looks like there is a spot for it on form 1040.  And if you took a loss, you don't get to write it off.  As we thought. 

https://www.irs.gov/businesses/what-to-do-with-form-1099-k#:~:text=On%20Schedule%201%20(Form%201040)%3A,Sold%20at%20a%20Loss%20%2421%2C000%22

 

carlsbad2's avatar
carlsbad2
2,036 posts
 

Something that hasn’t been said here that might help clarify it for some:

You are not a business. the tax law was not meant for you. It was designed for those who make their living by reselling on ebay. Have a garage sale and resellers will show up trying to buy anything they can resell for pennies. they will be moving fast and have a truck already half full of junk.

But in typical government fashion, they decided to go ahead and tax you if you made a profit, even it it was just luck.

 

As an aside, I’m not sure what happens if you sell 10 items in 2024. You sold 9 at a loss of a total of $10,000. But you sold one at a profit of $1000. You had a net loss of $9000. I hope they don’t tax you on the $1000 profit.  Those of us used fo filling out schedule D for capital gains know that this isn't how it works, we even harvest losses in December to offset gains.  But since they aren't letting you use losses to offset income, they may not let you use losses to offset gains made through other sales.

Jerry

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