Paypal Changes for 2022

Hopefully somebody here can answer the question of how to report losses to offset  "income"  when one receives a 1099k in 2023. Unfortunately,  IRS will not answer questions regarding tax laws over the phone! I don't have an accountant, as I do my own taxes.

@lula 

You do not get to offset losses against gains. Thats the current tax law.

The IRS has released an example of someone who has purchased a couch for $1200 and sold it for $800 on E-bay. This would NOT be taxable "income" despite the fact that Paypal would send out a 1099k. No different for those of us receiving less than we paid for stereo equipment. My question remains what IRS form/schedule will be needed to show such offsets?

@lula 

In your example, lets say you sell two couches. You paid $1,200 for each. You sell couch one for $1,500 and six months later sell couch two for $800. You owe tax on the $300 gain. You get no benefit or offset on the $400 loss from couch two. In order for you to offset those, it must be a business.

@ghasley 

I agree. However the 1099K would show income of $2300. My question is how do you report this on your tax return? My research seems to indicate "Other Income" on the 1040 and then Schedule 1, Line 2z and then Line 24z for the 2k offset. Then the 2k adjustment on Line 10 would be subtracted from the 2.3k on the 1040 with tax owed on the $300. Only a profit can be taxed. A separate statement/worksheet is suggested to show each transaction.