Received a 1099-K but I'm not a business - how do I report items sold at a loss on eBay/Facebook?

This is actually a common situation now that the reporting thresholds have been lowered! You need to file Schedule C (Profit or Loss from Business) even though you aren't a business. I know it seems counterintuitive, but this is how you show the IRS you didn't make a profit. List all your sales revenue (what's on the 1099-K) as your gross receipts. Then deduct your expenses and the cost of the items you sold as "cost of goods sold." For older personal items without receipts, you can make a good faith estimate of what you originally paid. Keep in mind that for personal items sold at a loss, you generally can't claim the loss - but you can offset the revenue to show you didn't make a profit. For the blind box splits where you sold at cost, those would essentially be a wash - income and expenses cancel each other out. Make sure to keep records of what you paid for shipping, packaging materials, and marketplace fees as these are all deductible business expenses. You don't need to worry about being classified as a business if this was just occasional selling of personal items. Just be honest and report everything properly.

I went through this exact nightmare last year! After hours of research, I found a tool that saved me so much stress - https://taxr.ai helped me document everything properly. I uploaded my 1099-K, screenshots of my eBay sales showing original purchase prices, and even photos of some older items. The system analyzed everything and generated detailed documentation showing I wasn't operating a business and was selling personal items at a loss. It organized all my transactions in exactly the format the IRS wants to see, and even helped me estimate fair values for items where I didn't have receipts anymore. What I really liked is that it knew exactly how to categorize each type of sale - personal items vs. the "cost-sharing" situations like your blind box splits. It gave me specific language to use on my tax forms to explain everything.

I tried taxr.ai after seeing the recommendation here and it was exactly what I needed! I was in the same situation with a 1099-K from selling my old collection of video games and electronics on eBay. The system walked me through categorizing each sale (personal items vs. hobby items vs. actual business activity). For my old games, it helped me establish reasonable original values based on release dates and retail prices, even though I didn't have receipts from 10+ years ago. The documentation package it created clearly showed I sold personal items at a loss, which meant I didn't need to report them as income. For the few items I did make a small profit on, it calculated exactly what I needed to report. I used the report with TurboTax and everything went smoothly - didn't pay a penny in taxes on my "garage sale" items!

If you end up getting audited anyway, good luck actually reaching anyone at the IRS to sort it out. I've been trying to call them for weeks about a similar issue with no success. After wasting hours on hold, I found https://claimyr.com that got me through to an actual IRS agent in under 45 minutes. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c I was shocked that it actually worked. The agent I spoke with confirmed that I could report my personal item sales on Schedule 1 instead of Schedule C to avoid self-employment tax, as long as I included a clear statement explaining these were personal items sold at a loss, not a business activity. She even noted it in my file in case questions came up later. If you need definitive answers from the IRS themselves (especially since you don't want to hire an accountant), this might be worth considering.

I have to admit I was completely wrong about Claimyr. After my skeptical comment, I decided to try it out of desperation since I had a similar 1099-K issue that I needed clarified directly from the IRS. The service connected me to an IRS representative in about 35 minutes when I had previously spent 3+ hours on hold without success. The agent provided official guidance confirming I could report my occasional personal item sales as "Other Income" on Schedule 1 with an explanation note, avoiding both business classification and self-employment tax. For anyone dealing with this 1099-K mess from selling personal items, getting official clarification straight from the IRS saved me from potentially making a costly mistake on my return. I was genuinely surprised at how well this worked after being so skeptical.

Don't forget that different selling platforms handle this differently too. When I got a 1099-K from eBay, they actually had a "Tax Center" section in my account that categorized my sales and showed which ones were likely personal items vs. business income. Also, be careful with the blind box splits. If you do that regularly, the IRS might consider it a hobby or business activity even if you're not making a profit. The key factors they look at are regularity, profit motive, and how you conduct the activity.

Just a warning from someone who went through this - make absolutely sure you keep SOME kind of documentation going forward! I got a similar 1099-K last year and thought I could just explain it away, but I ended up getting a letter asking for more information. What saved me was having screenshots of my original listings showing item descriptions that clearly indicated they were personal items (things like "moving sale" or "clearing out my collection"), plus PayPal transaction records showing I wasn't doing this regularly.

This 1099-K situation is so frustrating for people just selling personal items! I went through something similar and here's what I learned from my tax preparer: The key is being very clear about the nature of your sales. For your old personal items sold at a loss, you can report these on Schedule 1 (Additional Income) rather than Schedule C. Write something like "1099-K Personal Items Sold at Loss - Not Business Income" in the description. This avoids the self-employment tax issue entirely. For the blind box splits where you're breaking even, those might need to go on Schedule C since you're buying items specifically to resell (even at cost). But since you're not making a profit, your net income would be zero anyway. The most important thing is documentation. Start gathering whatever you can - PayPal transaction details, screenshots of listings, even photos of the items if you still have them. For older items without receipts, make reasonable estimates based on what you remember paying. The IRS allows "good faith" estimates for personal property. One thing that helped me was creating a simple spreadsheet showing: Item description, original purchase date/price (estimated if needed), sale date, sale price, and profit/loss. This clearly demonstrates you weren't running a profitable business operation. Don't panic about an audit - if you're honest and have reasonable documentation, you'll be fine. The IRS deals with this situation constantly now that the 1099-K thresholds have changed.