I googled for an answer, and the general consensus was YES, but only if I bought it for a profit.
It was never purchased for profit. It's just an older card I had in my collection that's could sell for 2k-3k. So, I was toying with the idea of selling it to pay a credit card and save for pet medical expenses.
How would i approach that sale tax-wise??
IM NOT LOOKING TO DODGE! Im looking to do the correct order of operations. It came from a $19.99 booster tin back in 2015ish.
EDIT- Instant advice everyone! Thank you so much. Im screenshotting everything here and researching the articles you linked!
Do I need to declare an expensive trading card I sell? (And HOW??)
byu/BabushkaRaditz intax
Posted by BabushkaRaditz
12 Comments
You would report the sale (net proceeds and cost) on form 8979 as a capital gain (sounds like collectible, long term)
The intent to make a profit is part of the criteria to determine if the activity is a trade or business which would change the reporting and tax, but not that it would still be subject to tax, specifically capital gains
It would be a capital gain on personal property. The Federal tax is either 28% or your regular marginal rate, whichever is lower.
What’s the sum total of every card you have? If you literally spent 20 and could sell it for 2k, that’s a collectible capital gain. There’s a schedule for it.
I’d look to mitigate any capital gains with total expenses etc and no one’s knocking on your door for 2k.
https://www.irs.gov/taxtopics/tc409
It’s a capital asset that is a collectible. 28% maximum gain. Report on Schedule D when you file for the year in which it is sold.
https://www.irs.gov/taxtopics/tc409
the government screws you every chance it gets……
Eh- you are talking to accountants/ tax professionals. How are you selling it? How are you getting paid? Overall, neither the IRS or anyone else cares about 2k on a used item you got 20 years ago.
I do a lot of consignment sales and have asked our CPA’s. It is a used personal item that (luckily) appreciated in value, when most don’t. If you didn’t write off the original cost of purchase, storage expenses, insurance expenses- ‘eh’. if you buy a table for $10 and have a garage sale 20 years later and someone pays you $1k- congratulations!
If you are really worried, call the IRS.
I have people that love going to garage sales and buying things, then they consign them with me and double their money (yippee!)… but, I won’t take everything they buy, and they have gas/ transport expense, etc… but, being good people who are trying to do the right thing, they wanted to declare their income. I asked if they were tracking their expenses (of course they weren’t), and told them to tell that part to their CPA first before I issued them a 1099 for $2,400. I don’t mind issuing the 1099- I do declare their payments as an expense, and I track them, but I am pretty sure their expenses for their hobby (really, it’s a hobby) exceed any income- and the IRS largely agrees. If you aren’t expensing your hobby, don’t declare the ‘gains’ (unless they are over $10k or you want to show the income for some reason).
An amateur painter sells a painting for $1k- congratulations! How many canvasses, brushes, paints were bought, over years, to get that one sale? You sell a painting for $100k? Now, there is something to look at.
Take the win, and move on. It’s resale of a personal item.
There is no reason what so ever to declare or show this as income. Im a CPA and no way I would advise a client to declare that.
I wouldn’t. If sold privately why would you say anything. I used to read gold coins and made times of money and never claimed it.
Btw I’m an Enrolled Agent lol
Don’t forget the capital gain is not necessarily from the first dollar; it’s from the cost basis that you use, whether it was what you paid for it originally, or if inherited, the fair market value on the date of death of the decedent. Of course if you receive funds by check or a digital payment platform, there is a paper/electronic trail, so better to be safe than sorry and report it.
Lots of confusing information going around. If you purchased the card as strictly a hobby you are exempt from the automatic 28% tax. Pay the taxes on the value of the card minus the purchase price. If you have engaged in a pattern of purchasing cards as an investment or business you are definitely entering the realm of possibility for the 28% tax. Tax Adviser wrote heavily on this subject around the pandemic when everyone was getting into collectible items.
https://www.thetaxadviser.com/issues/2019/nov/taxation-collectibles/#fn_15
Review area under this heading: Losses realized on disposition of collectible assets
This is a garage sale item. Nobody is going to care or ask how you got rid of it.