IRS tax question

[birdman42]

I can't answer for the AH side on what gets reported to the IRS and how. I'd be interested to hear someone from an AH ring in.

Here's how it happens on your end. BB cards are considered capital assets just like shares of stock. It's up to you to keep track of three figures for each item, and report the sale no matter the amount. In the breach, I'd imagine small amounts don't get reported.

The holding period--a year or less between the purchase and the sale is short-term, more than a year is long-term.
Your basis--the purchase price plus any costs (AH purchase commission, sales tax, inbound shipping, and grading are the most likely). If you acquired something in a trade the basis of the item you gave in the trade carries over to the item you received, +/- any cash.
Your receipts--the selling price minus the costs of sale (AH seller's commission and outbound shipping are the most likely here). You'd have to check with the AH to see whether they reported your receipts as the gross selling price or net of fees. And unlike stocks, the AH has no idea what your basis is.

The dollar figures seem straightforward, but if you acquired items as part of a group you have to be careful about how you assign costs.

--From here on, this is based on the tax code as it stands right now. Who knows what will be in place for 2018.--

For any one sale you can net all the short-term results against each other; the same with the long-term results. That is, if your only sales were through a single AH one time, you can report one ST result and one LT result. If you sold on multiple occasions, each occasion should be shown separately. The info goes on Form 8949, which carries to Schedule D.

Short-term gains are taxed the same as ordinary income. Long-term gains may get special treatment. Because BB cards are considered collectibles, gains are taxed at ordinary rates up to a max of 28%. So if you're in the 15, 25, or 28% bracket you won't see any tax advantage from the sales. If you're in the 33 or 39.6% brackets then you will.

If you have a loss, you can take a max of $3000 against your 2018 income; the rest carries forward into future years.

This is not to be taken as "tax advice," but as a statement of facts. For specifics you'd need to provide the details to a tax advisor. (I could be that person in a non-public setting.)

Bill Todd