I added income from my 1099-K and when trying to file, I get an error via Form 1099-B, saying the sales proceeds don't match the payment amount on 1099-K. What do I do?

I would not remove the IRS form 1099-K and ignore the form.  The larger the dollar amount, the more likely the IRS will follow up and ask why that income was not reported.

If you are reporting sales as Personal item sales, you will be reporting the entries on IRS Schedule D.  Associate the 1099-K income with Schedule D and not the other Schedules.

Personal items sold for less than their cost basis (most likely, the original purchase price) report $0 capital gain on line 7 of the Federal 1040 tax return.

Personal items sold for more than their basis report the gain on line 7 of the Federal 1040 tax return.  See this example.

                       Selling           Cost

                       Price              Basis

#1                   $500              $1,000        Capital loss on personal item = $0 gain/loss reported

#2                   $400               $300          Capital gain on personal item = $100 gain

#3                   $100               $100          No capital gain or loss              = $0 gain/loss

                        $1,000           $1,400

I would make some kind of breakdown of your album sales.  If you sold 100 albums in 2024, how many fit into each of the categories listed above?  Then assign a selling price and a cost basis.  

Category #1 was sold for loss.  The loss is reported but does not offset a gain reported for category #2.

Category #2 was sold for a gain which is reported and taxed.

Category #3 was sold for $0 gain or loss.

To report Personal item sales in TurboTax Online, follow these directions.

• Down the left side of the screen, click Federal.
• Down the left side of the screen, click Wages & Income.
• Scroll down to Other Common Income click on the dropdown menu.
• Click Start to the right of Form 1099-K.
• At the screen Did you get a 1099-K?, select Yes.
• At the screen How would you like to upload your 1099-K? click Type it in myself. 
• At the screen Which type of income is your 1099-K for, select the button for Personal item sales.  Click Continue.
• At the screen Let's get the info from your 1099-K, enter the information.      Click Continue.
• At the screen Personal Item Sales, you are told that further information will need to be entered.  You may report some or all items were sold at a loss or had no gain.
• Refer to the prices above.  If $600 of the selling price will not be reported, enter $600 under I sold some items at a loss or had no gain. 
• Learn More provides detailed information for the next steps.  Click Continue.
• At the screen Your 1099-K summary, notice that the income relates to ‘Personal Items’.  Click Done.
• At the screen Your income and expenses, scroll down to Investments and Savings (1099-B, 1099-K….).  Click Add/Edit.
• At this screen, you will be asked to Review the Personal item sales (1099-K).  Select Review.
• At the screen Now, enter one sale…., answer questions about the personal item sale.  
• Refer to the prices above.  Because you are only reporting the gain transaction, report $400 as Proceeds and $300 as Total amount paid.
• Click Continue.
• At the screen, Let us know if any of these situations apply to this sale, sales expenses may be recorded.

The entry will be reported:

• on Schedule D of the Federal 1040 tax return, and 
• on line 7 of the Federal 1040 tax return.

Capital loss for a personal item sale reports $0 capital gain on line 7 of the Federal 1040 tax return.