Tax question

[Archive]

Posted By: Bob S

As I was wrapping up the taxes last weekend, a thought occured to me, which I've casually thought about several times before, but never followed up on.....some of you know the "procrastinator's routine.

In the aggregate card/collectible selling I've done, mostly several years ago, I always had a net loss each year. (Quite the brilliant trader, eh) LOL

Anyway, of course, they were non deductible losses due the the IRS code section re: "hobby" definition and its particulars.

But, with the recent rising collectible values, I realized that my selling from now on, or until the cyclical correction (in this trade, as most of you know, trends tend to last quite a while...reference the most recent period of decline from the late '80s peak), that I may actually have a year or years in which I have a profit. Please keep in mind, that I'm referring to the resale market and not the dealer/wholesaler market.

I'll be selling more and more items purchased near the prior bottom, not to mention the vintage card price spike, which I think will rather plateau as it finds it's peak, and not have a disasterous sharp decline. (the rule of alternation) as I age to pay the bills.

Well to finally get to the point...(hell, I should become a politico's speechwriter....most words, least real content....LOL) Is there any federal income tax to be paid on the profitable net annual sales of a "casual" hobbyist?

I'd like to get both the "theoretically" correct answer, as well, as how this issue is actually dealt with in the real world reality of how the IRS handles it.

BTW, do the big houses) (Mastro, Leland, Heritage, etc.) report income to the IRS?). I've never used them before.

You can tell I don't even know many skillful people who have had this profitabilty curse to deal with.

Thanks,

Bob