Posted By:
JoannI know there have been tax threads before, but these are new questions as far as I know.
I didn't make a whole lot in 06 selling cards, but did end up making some (and almost all of it went back into cards). I plan to claim it as ordinary income under "other income" on the 1040 form, and as "income from activity not engaged in for profit".
Questions:
Is it better to use 1250 Sale of Collectibles? It's not a whole lot of money, and I will pay more tax by claiming it as ordinary income than the 28% collectibles rate. I'm thinking I'd rather just claim it as ordinary income and keep my records and calculations attached to my personal copy of the return (in case of audit) than have to find another form. This should be okay, as long as I'm paying a higher rate, right?
IRS says that hobby expenses are deductible only to the extent of hobby income. I don't plan on deducting ebay fees, etc, but do some of you others deduct expenses (not as an itemized deduction, but as an offset to income before you report the income)?
Do you also offset losses from card sales, and grading fees?
Thanks to anyone who has snored their way to this point of the post and feels like ringing in.
This is the first year I've really sold cards, and I ended up a little bit ahead - and I definitely plan to claim it as income. No way I want to get off on the wrong foot in that area.
Joann