Selling in volume regarding taxes.

[ValKehl]

Hi Bill,
Thanks for the comprehensive info you presented in Post #8. Do I correctly understand that this info applies only to sports collectibles "dealers" (selling at shows, on-line, and/or via brick-&-mortar shops)? If you are "dealing" with a profit intent, then it's Form 1040-Line 12, supported by Schedule C. If you are "dealing" without expecting to make a profit, the IRS considers you a hobbyist, and your net sales (gross sales less cost of sports collectibles sold) go on Form 1040-Line 21, and your operating expenses are deductible on Schedule A (if you itemize, and subject to the limitation you described).

But, I believe most of us Net 54 members are merely "collectors" whose do sell some of our sports collectibles from time to time as we upgrade items in our collections, change our collecting focuses, etc. Is my understanding correct that when "collectors" do this, we come under the IRS's rules for gains on the sales of "collectibles" which I believe are taxed at 28%? Since sports collectibles are considered capital assets, this involves reporting capital gains on Form 1040-Line 13, supported by Schedule D, supported by Form 8949 (for most folks, I think), along with using the 28% Rate Gain Worksheet and the Schedule D Tax Worksheet in the Form 1040 Instructions book - right?

If my comments above about "collectors" are correct, how does the IRS distinguish between a "collector" selling "collectibles" and a "dealer" who does not have a profit intent? Would it be the amount and frequency of selling activity? The reason I ask is I have always used the Schedule D-Capital Gains approach, as I was not aware of the Form 1040-Other Income approach (which seems to me to be much simpler, to the extent that anything is simple when it comes to income tax forms and rules!) (and, which could result in a less-than-28% tax rate) that you described in your post.

Thanks in advance for your response,
Val