Tax consequences of paypal Options

[sixaddict]

Well we were all aware of this coming but just got my love letter 1099 from PP.
Trying to figure how to handle.
Anyone have legitimate advice?
Obviously the 1099 is gross income……but that would be if cost basis was zero and that is not the case. If you don’t itemize how do you get a fair assessment.
Wont get into political weeds but this is BS.

[GregAmy]

Well we were all aware of this coming but just got my love letter 1099 from PP.
Trying to figure how to handle.

1099-K are reported to the IRS but the form is not submitted as part of the tax return (as a 1099-NEC would be). How to handle that information depends on its usage.

If you are selling parts or services for profit, you are running a business and must report that income on a Schedule C. For this type of business usage, the 1099-K amount should be reported as "gross receipts" in Schedule C. If it's a combination of business and personal, only the business portion of the receipts should be reported in Schedule C.

For personal use, such as reimbursements and sales of personal items at a loss, report that portion on the top of Schedule 1 which says "For 2024, enter the amount reported to you on Form(s) 1099-K that was included in error or for personal items sold at a loss". This acknowledges to the IRS that you received the transfers but you are declaring these funds as personal transfers, not subject to income tax.

The amounts added as gross receipts to Schedule C plus those reported on Schedule 1 as personal use should sum to the total reported on the 1099-K.

GA, IRS-certified tax preparer

Edit: unrelated PS: transfers via Zelle do not generate 1099-K, since that's a bank-to-bank transfer (whereas PayPal, Venmo, etc are third-parties). Zelle doesn't need to report 1099-K because the IRS can already get access to your bank records if need be (and large transfers are generally reported); not so easily with PayPal/Venmo.