Quote:
Originally Posted by RCMcKenzie
Thanks, Bob. I feel like you should send me a bill for consulting. I don't do much selling or trading, but lots of buying. They used to have something called a casual sale. I actually have pretty good records on my cards.
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LOL
Don't worry, no bill is coming.
And the concept of casual sales still exists, but as I would try to explain it to clients, think of a casual sale as like a garage sale to clear stuff out of the house. You don't continuously do it all the time, so you aren't a dealer in a trade or business. And you're usually just selling your old used clothing, furniture and other junk that you originally paid a lot more for. In which case you are basically selling everything for a loss anyway, so why waste yours and the IRS's time by having to go through the trouble of reporting it all on your tax return when nothing will ever be owed? But now you're talking collectibles that aren't just used personal items that depreciate in value over time. Plus, with the way card prices are today, the values and amounts are no longer insignificant. And couple all that with people using online venues and platforms to sell a lot of their stuff nowadays, like Etsy, Ebay, Comc, etc. These are all initially assumed by the IRS, and many others, as more like dealers in business who use the online services to sell their stuff. Think of it this way. With that new lowered reporting standard that went into effect, starting this year, anyone selling $600+ worth of stuff on Ebay is going to get a 1099-K form reporting their total sales for the year of $600 or more, and a copy will be sent to the IRS as well. Now maybe you only used Ebay for a couple "casual sales" and only sold two or three cards this whole year, for a total of say $800 in sales. When the IRS gets that 1099-K form next January with your name on it, showing you had $800 in sales to report, want to bet if the IRS assumes you are a dealer or a collector selling collectibles? They are going to initially assume you are a dealer, unless you properly file your tax return and accurately report at least the total of those $800 in sales shown on your 1099-K form as gross receipts from individual collectibles sold.
So with the advent of online and other related types of sales and sales venues, the idea of "casual Sales" has been altered a little in the way it is viewed nowadays.
And keep up with the records. And if/when the time comes to have to report things on your tax return, estimate the tax basis of some cards if you have to. Just do the best you can. The IRS can, and does, work with people more than you may think when it is difficult to find every single record or receipt.