Quote:
Originally Posted by Dandor
There is the ability for deductions on a Schedule C and Schedule D. It gets a bit messy with collected tax, but it is based on profit. The IRS expects this 1099-K income on a Schedule C, but you can do it as short/long term capital gains for collectibles on a schedule D. Losses can be carried forward as well. Believe it is a maximum of $3000 applied to the next tax year.
Just keep detailed records and give it to your CPA. By asking this question, my advice is for you not to attempt to do your own taxes.
|
And here again is an example where someone posts something that is only partially true, so that someone else reading it may make a mistake in filing their taxes if they think what they were reading is totally correct. And why, despite maybe an additional cost, I always advise people to at least talk to a qualified tax professional if they're the least little bit unsure of what they're doing. Heck, people using Turbotax can access their online professional staff for questions. You don't have to all go paying someone hundreds, or even thousands, of dollars to have someone else prepare your tax returns for you.
Now to address the partial truth in the statement above. You can generate net capital losses from the sales of cards, which can then be carried forward to future years, but only if you can claim the cards you sold were being held by you as investments, and you consider and can show yourself to be an investor. If instead you treat your cards as hobby collectibles, and yourself as a collector, you cannot deduct any net capital losses from the sales of those collectible cards on your tax return, and there is no capital loss carryover for such hobby losses either. You still get to net your collectible losses against your collectible/hobby and all other types of capital gains first. It is only if you end up with net capital losses attributable to hobby collectibles that they are nondeductible, and cannot be carried over to future tax years. But yes, you are otherwise limited to an overall net capital loss deduction of only $3,000 per year for non-hobby/collectible losses, with any such excess non-hobby/collectible capital losses over that $3,000 limitation amount being carried forward to be used/deducted in future years, or if unused, lost at the taxpayer's passing.