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Posted By: Mark

For non-dealers, collectibles (including cards) are capital assets, however, there is a special collectibles capital gains rate of 28%. IRC sec. 1(h)(4)(A)(i). Thus, cards do not qualify for the 15% capital gains rates that apply to normal capital assets (stocks, bonds, etc.) held more than 12 months, nor are they taxed at one's marginal ordinary income tax rate.

Also, keep in mind that the burden of proof is on the taxpayer to prove his or her basis. To substantiate basis, one would generally need an invoice, credit card statement, paypal statement, cancelled check, etc.

Auction houses are not required to report sales to the IRS, regardless of amount. See How the IRS Can Close the Online Auction Tax Gap, 2005 TNT 2-38 (December 20, 2004).