[Rhotchkiss]

Right. There are no ordinary or necessary business expenses associated with a collectible, but like stock etc, you can add any transaction fees you incur on acquisition and disposition to your basis.

I buy a card for $1000 with BP and then pay another $100 in taxes, shipping, etc. my basis is $1100, and if I sold it immediately for $1100, I would have no gain.

Three years later I sell the card for $1700. My taxable gain is $600 ($1700 - $1100 basis). If there are costs associated with the sale, then those reduce my gain. Let’s say I sell the card for $1700 on ebay, but eBay and PayPal take 10%, or $1700, then my net amount realized is $1,530. You subtract the $1100 basis and my taxable gain is $430.

Scott is correct that you normally do not deduct or capitalize costs associated with owning the card (storage, insurance, etc); although from a tax perspective, I don’t see what you shouldn’t be able to capitalize these costs to the basis of the card.

BTW- To quality my comments, I have a masters is tax law from Georgetown and practiced tax (and real estate) law for 7 years before I gave that up in 2006.