Looking for tax software that lets me fill out Schedule 1 line 24z to offset 1099-K income?

Title: Looking for tax software that lets me fill out Schedule 1 line 24z to offset 1099-K income? 1 I got hit with a 1099-K from PayPal for about $650 worth of personal items I sold throughout last year. These were all things I sold at a loss (old furniture, some electronics, random household stuff) - nothing business related at all. I'm trying to figure out how to properly report this on my taxes and offset this "income" since it wasn't actually income. From what I've read, I need to report the 1099-K amount on Schedule 1 line 8z, but then I should be able to offset it on line 24z. The problem is none of the tax software I've tried (TurboTax, H&R Block, and TaxAct) seems to give me an option to fill out line 24z! They all want me to go the Schedule D/Form 8949 capital gains route instead, which seems way more complicated for what should be a simple offset. Am I missing something here? Is there any tax software that will actually let me use line 24z to offset this amount? Or do I really have to go through all the capital gains reporting even though these were just personal items sold at a loss?

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18 comments

Jamal Washington

•8M

12 You're right that you need to report the 1099-K amount, but there's some confusion about how to handle personal items sold at a loss. When you sell personal-use items (furniture, electronics, etc.) at a loss, those losses generally aren't deductible. However, the 1099-K reporting requirement creates a situation where PayPal reported the gross proceeds to the IRS. Most tax software directs you to Form 8949/Schedule D because that's technically the correct approach for reporting personal property sales. Even though it seems more complicated, it allows you to properly document that these were personal items sold at a loss. On Form 8949, you'd list each item, show your cost basis (what you paid originally), and the selling price. For personal items sold at a loss, you'd report the sales proceeds but can only claim losses up to the amount of gains (which it sounds like you don't have). Some tax software products like FreeTaxUSA or Cash App Taxes (formerly Credit Karma Tax) have more flexibility with manual entries on various forms. You might want to try those if you're determined to use line 24z approach.

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Jamal Washington

•8M

12 For personal items where you don't remember the exact purchase price, you can make a reasonable estimate of what you paid. You don't need to be precise down to the penny - a good faith estimate is acceptable. Just be prepared to explain your basis calculation if questioned. Yes, unfortunately, the 8949 process treats your old couch similar to a stock transaction, which feels ridiculous but it's how the tax code works. If you sold multiple small items, you can group similar items together (like "household goods - $200") rather than listing every single item separately. The important thing is documenting that these were personal items sold at a loss, not business inventory or investments with taxable gains.

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Jamal Washington

•8M

9 After struggling with a similar PayPal 1099-K issue last year, I discovered taxr.ai (https://taxr.ai) and it was a complete game-changer. I uploaded my 1099-K and other tax documents, and their AI system quickly identified the best way to handle my personal item sales. What impressed me was how it automatically suggested the proper way to report everything without me having to figure out all the technical form details. The system walked me through exactly what information I needed to enter about my sales and even helped me estimate reasonable cost basis amounts for things I couldn't remember the exact purchase price for. This saved me hours of research and prevented potential errors that could have triggered an audit flag.

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Jamal Washington

•8M

9 It gives you the completed forms with all calculations done that you can either print out for paper filing or import directly into most major tax preparation software. You don't have to manually re-enter everything, which was a huge relief. The system specifically addressed my 1099-K from PayPal for personal items sold at a loss and recommended the most efficient way to report it. In my case, it actually suggested using Form 8949 but simplified the process by organizing my items into logical categories and calculating everything automatically. It showed me exactly where each number needed to go in my final tax return.

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Jamal Washington

•8M

3 Just wanted to update everyone - I tried taxr.ai after seeing it mentioned here and it actually solved my problem! After uploading my 1099-K and answering a few questions about my personal item sales, it correctly identified that I needed to use Form 8949 but made the process MUCH easier than I expected. The system grouped my items logically and helped me establish reasonable cost basis amounts. What I really appreciated was the clear explanation of WHY this approach was necessary rather than using Schedule 1 line 24z (turns out that line is more appropriate for certain other types of income offsets). The whole process took me about 20 minutes instead of the hours I was spending trying to figure it out on my own. When I imported the completed forms into my regular tax software, everything transferred correctly and I didn't get any error messages. Huge relief!

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Jamal Washington

•8M

15 For those who are still struggling with IRS questions about 1099-K reporting, I had a great experience using Claimyr (https://claimyr.com) to actually speak with an IRS agent about this exact issue. After getting nowhere with online research and waiting on hold for hours, I was skeptical this service would work, but they got me connected to a real IRS representative in about 15 minutes! You can see how it works in their demo video: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with confirmed that for personal items sold at a loss, Form 8949 is indeed the correct approach. She walked me through exactly how to report everything correctly and confirmed that grouping similar low-value items together was acceptable. Getting this official confirmation gave me peace of mind that I was handling my taxes correctly.

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Jamal Washington

•8M

15 It uses automated technology to navigate the IRS phone system and wait in the queue for you. When an agent becomes available, it calls you and connects you directly to them. It's completely legitimate - you're still talking to the same IRS agents, just without wasting hours on hold. I verified the information by cross-checking with IRS Publication 525 which specifically addresses personal property sales. The agent was correct that for personal items sold at a loss, Form 8949 is the proper reporting method. I also confirmed this with my past tax preparer who agreed this was the right approach. The peace of mind from getting official confirmation was definitely worth it for me.

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Jamal Washington

•8M

20 I have to eat my words about Claimyr. After my skeptical comment, I decided to try it anyway because I was desperate for answers about my 1099-K situation. I got connected to an IRS representative in less than 20 minutes (after previously spending HOURS on hold trying to call myself). The agent explained exactly how to handle my personal item sales reported on a 1099-K. She confirmed that while losses on personal items aren't typically deductible, I still needed to report the transactions on Form 8949 to reconcile the 1099-K amount the IRS received. She also advised me on documentation to keep in case of questions later. What would have been another frustrating day of research and uncertainty turned into a 15-minute call with clear, authoritative answers. Still think the tax system is broken, but at least there's a way to get help navigating it!

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