Taxes ? on Auction House Consignments

[puckpaul]

Originally Posted by insidethewrapper

https://www.nolo.com/legal-encyclope...rom-hobby.html

According to this article, since 2018 tax law ,if you are a collector ( hobby vs business) , you must report the total sale as income.

No.. you are misreading it. You have to report the total income and cannot deduct ordinary expenses and costs... but you most certainly can deduct the cost of the items you sold. It’s income that is taxed, not sales prices.

[Directly]

So the AH pays in cash, no checks or paper trail 1099--nice!!

[Aquarian Sports Cards]

Auction houses don't usually pay in cash because they need the paper trail for their OWN records.

We do NOT report sales to the IRS or the state Departments of revenue but are required to keep our records for 7 years in case they are ever needed for divorces, taxes, estates etc. If you get audited and they somehow get to us, they are going to get the info so I would suggest honesty might be the best policy.

[egbeachley]

Some bad information here.

You do NOT pay taxes on the total sales price. You can always deduct the cost of the item. Doesn’t matter if you are a business or collector. Only the gain amount is taxed, just the tax percentage rate may change.

2018 tax laws did NOT change the fact that you pay taxes on the gain amount, NOT total sales price.

[Natswin2019]

I think the best advice in this whole thread was the first sentence of the first reply. Go see your tax guy or accountant.