Quote:
Originally Posted by Eric72
So, here's a situation most of us (presumably) will find ourselves in.
I bought a card at a show...paid cash, no receipt. For the sake of argument, let's say I paid $200. I keep a record of the sale; however, have nothing other than my spreadsheet (and maybe an ATM receipt) to show what and when I paid for it.
Fast forward a year or more. I now sell the card on eBay or some similar online site. Let's say I net $250 after fees and shipping.
Do I pay taxes on the entire $250 - or - does my record-keeping, along with self-reporting correctly, allow me to only pay taxes on the $50 gain?
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You pay taxes on $50. That’s what your net gain is, or gain recognized. If you are audited, your spreadsheet plus the eBay receipt is fine proof of basis and net sale proceeds; in fact, the spreadsheet can be great proof if it is meticulously -and contemporaneously maintained.