


Ask the community...
Has anyone been able to use TurboTax to file an amended return for crypto losses? Their interface is confusing me when trying to enter all my transactions from 2021.
I was in almost the exact same situation! Lost about $8k in crypto in 2021 and completely ignored it on my taxes because I was so frustrated. Finally bit the bullet and filed an amended return (Form 1040-X) last month. The process wasn't as bad as I expected. You definitely should report all crypto transactions even with zero gains - the IRS considers each trade a taxable event regardless of profit/loss. I gathered all my exchange statements, calculated my basis using FIFO method, and filed the amendment. Already got my refund for the $3k loss deduction against my 2021 income, and I can carry forward the remaining $5k to offset future gains or take another $3k deduction next year. Don't let the paperwork intimidate you - it's worth doing especially since you're still within the 3-year window to amend 2021.
I'm having exact same problem!!! Last month I sold my grandmother's old china set for $700 that was probably worth thousands when new but I don't have a receipt from the 1970s lol. Also sold some designer clothes I impulse bought and never wore but took a big loss on them. How do u even figure the cost basis on inherited items like that china? Its so confusing and I'm scared PayPal will send a 1099K even though I'm nowhere near the threshold and then the IRS will think I'm running a business or something which I'm definitely not!!!
For inherited items like your grandmother's china, you can use what's called "fair market value" at the time you inherited them. You don't need the original receipt from the 1970s. You can research similar vintage china sets on sites like eBay or antique sites to establish a reasonable value. For the designer clothes, you can use credit card statements, email confirmations, or even screenshots of the current retail price of similar new items to establish that you sold them at a loss. The key is making a good faith effort to document these were personal items sold at a loss. Even without perfect documentation, creating this kind of reasonable basis for your claims is typically sufficient for the IRS.
@Jordan Walker, I completely understand your stress about this! I went through something very similar last year and want to share what I learned that might help ease your worries. First, the good news: you're thinking about this correctly. The IRS distinguishes between personal items sold at a loss versus actual business income, and you won't owe taxes on selling your personal belongings for less than you paid. Here's what I did when I was in your exact situation: 1. Created a simple spreadsheet with columns for: Item Description, Approximate Purchase Date, Estimated Original Cost, Sale Price, and Notes 2. For items without receipts, I researched similar items online to estimate what I originally paid 3. Added notes like "personal designer bag purchased approximately 2019, selling due to financial need" The key insight that helped me: the IRS isn't trying to trap people selling personal items at yard sale prices. They're looking for patterns that suggest unreported business activity. Your situation - selling varied personal items at obvious losses - is clearly not a business. Regarding the thresholds, yes it's confusing! PayPal has been more aggressive with 1099-K reporting, but remember: receiving the form doesn't create a tax obligation. You'll just need to show these were non-taxable personal sales when you file. Don't let this keep you from selling items you need to sell! Just document what you can reasonably document, and you'll be fine.
11 Has anyone used a CPA or tax attorney to deal with this kind of situation? Wondering if it's worth the cost or if I'm better off handling it myself.
1 I used a tax attorney last year when I owed about $45k. Cost me $3500 but was 100% worth it. They reduced my total liability by finding mistakes in my original filings and negotiated a payment plan I could actually afford. They also kept the IRS from putting liens on my property.
I went through a similar situation a few years back - owed about $52k and was terrified of losing my retirement savings. Here's what I learned: You can't really "volunteer" for a levy, but you can definitely be proactive. The IRS would much rather work with you than seize assets. When they do levy retirement accounts, you avoid the 10% penalty but still owe income tax on the distribution. My advice: Call the IRS immediately (or use one of those callback services mentioned here - they actually work). Be honest about your situation and request a reinstatement of your installment agreement. They often approve modified terms, especially if you can make a good faith payment upfront. I ended up making a partial withdrawal from my 401k (took the penalty hit) to show good faith, then negotiated a manageable monthly payment for the rest. Yes, it hurt short-term, but it kept me in control of the situation rather than having them dictate terms. Don't wait for the levy - once collection enforcement starts, you have way fewer options and much less negotiating power.
This is really helpful advice, thanks for sharing your experience. The part about maintaining control versus having them dictate terms really resonates with me. How long did it take for them to approve your modified payment plan after you made the good faith payment? I'm trying to figure out my timeline here since I just got the breach notice.
Has anyone filed Form CT-3-S for NY? I have an S-Corp (not an LLC) in New York but live in Connecticut, and I'm totally confused about what I need to file where. The NY website is so complicated!
Yes, I have experience with CT-3-S. For S-Corps in NY with non-resident owners, you need to file both the CT-3-S at the entity level and then you personally need to file the IT-203 nonresident return to report your share of NY source income. It's more complicated than LLC pass-through taxation.
This is exactly the kind of multi-state tax complexity that trips up so many LLC owners! Based on your situation, here are the key points: Since you're a Colorado resident performing all work in Colorado, that's where you'll owe state income taxes on the LLC income - regardless of where the LLCs are registered. Colorado will tax you on your worldwide income as a resident. For Delaware: Good news! Delaware generally doesn't tax income from LLCs that don't have physical presence in the state. You'll just need to pay the annual franchise tax ($300) to maintain registration. For New York: This is trickier. If your NY LLC has any nexus to New York (clients there, meetings there, property there), you might need to file NY returns. Even if you don't owe NY tax because you're not a resident, you may still need to file informational returns. One thing to watch out for: Make sure you're not creating unintended nexus by having business bank accounts, registered offices with mail forwarding, or conducting any business activities in DE or NY. I'd recommend consulting with a multi-state tax professional to review your specific situation, especially given the complexity of nexus rules. Each state interprets "doing business" differently, and you want to avoid any compliance issues.
Keisha Robinson
17 Another important thing to know - starting in 2022, Stripe also includes sales tax in the gross amount on the 1099-K! If you collect and remit sales tax through Stripe, that's also contributing to the difference. For example, if you sold $100 worth of products and collected $8 in sales tax, the 1099-K shows $108 even though the sales tax isn't your income. Make sure you're tracking and deducting any sales tax that's included in the gross amount but that you've remitted to your state.
0 coins
Keisha Robinson
โข4 Oh wow, I didn't even think about the sales tax angle! Do you know where on Schedule C we're supposed to deduct the sales tax collected? It seems wrong to include it as income since we're just passing it through to the state.
0 coins
Haley Stokes
โขSales tax you collect isn't considered income - you're acting as an agent for the state. On Schedule C, you can handle this by either: 1) Reducing your gross receipts by the sales tax amount on Line 1, or 2) Including it in gross receipts but then deducting it as "Other expenses" on Line 27a. Most tax pros recommend option 1 since it's cleaner. Just make sure you have good records showing how much sales tax was included in your 1099-K versus actual product/service sales.
0 coins
Sofia Morales
I went through this exact same nightmare last year! The key thing to understand is that Stripe's 1099-K is essentially a "gross sales" report - it includes everything that flowed through your account before ANY deductions. Here's what I found contributed to my $18k difference: - Processing fees (about 2.9% + 30ยข per transaction) - Refunds and chargebacks (counted as "gross" even though you returned the money) - Disputes and failed payments that were initially processed - Any subscription billing that was later reversed The good news is you can deduct ALL of this on your tax return. I use Schedule C and put the full 1099-K amount as gross income, then deduct processing fees under "Other business expenses" and refunds under "Returns and allowances." Pro tip: Go to your Stripe dashboard โ Reports โ Balance and download the annual summary. It breaks down exactly where every penny went. Keep this with your tax records - it's your best friend if the IRS ever questions the difference. Don't stress too much about it looking suspicious. This discrepancy is super common with payment processors, and the IRS knows about it. Just make sure you have good documentation!
0 coins