Ebay tax reporting drops from $20,000 to $600

[BobC]

Originally Posted by Vegas Cards

If we now have to pay taxes on gains, can I offset the gains against my losses from collecting in the '80s & '90s? I'm still smarting from my investment in Score and Donruss collector's sets.

Depends! Did you actually file tax returns back in the '80s and '90s reporting capital losses from the sales of all those Score and Donruss sets, and be sure to have had those sets treated and reported as investment assets, and not just as hobby collectibles? Assuming not, the answer would be no. And the statute of limitations to go back now and try to amend those returns passed decades ago. Sorry.

[Tabe]

Originally Posted by BobC

Depends! Did you actually file tax returns back in the '80s and '90s reporting capital losses from the sales of all those Score and Donruss sets, and be sure to have had those sets treated and reported as investment assets, and not just as hobby collectibles? Assuming not, the answer would be no. And the statute of limitations to go back now and try to amend those returns passed decades ago. Sorry.

Can you count as expenses the actual cost of an item? Say you buy a jersey for $60 and sell it for $75 ($67 after Ebay fees) - do you count $7 in income or $67 or $75?

[Dandor]

Originally Posted by Tabe

Can you count as expenses the actual cost of an item? Say you buy a jersey for $60 and sell it for $75 ($67 after Ebay fees) - do you count $7 in income or $67 or $75?

There is the ability for deductions on a Schedule C and Schedule D. It gets a bit messy with collected tax, but it is based on profit. The IRS expects this 1099-K income on a Schedule C, but you can do it as short/long term capital gains for collectibles on a schedule D. Losses can be carried forward as well. Believe it is a maximum of $3000 applied to the next tax year.

Just keep detailed records and give it to your CPA. By asking this question, my advice is for you not to attempt to do your own taxes.

[BobC]

Originally Posted by Dandor

There is the ability for deductions on a Schedule C and Schedule D. It gets a bit messy with collected tax, but it is based on profit. The IRS expects this 1099-K income on a Schedule C, but you can do it as short/long term capital gains for collectibles on a schedule D. Losses can be carried forward as well. Believe it is a maximum of $3000 applied to the next tax year.

Just keep detailed records and give it to your CPA. By asking this question, my advice is for you not to attempt to do your own taxes.

And here again is an example where someone posts something that is only partially true, so that someone else reading it may make a mistake in filing their taxes if they think what they were reading is totally correct. And why, despite maybe an additional cost, I always advise people to at least talk to a qualified tax professional if they're the least little bit unsure of what they're doing. Heck, people using Turbotax can access their online professional staff for questions. You don't have to all go paying someone hundreds, or even thousands, of dollars to have someone else prepare your tax returns for you.

Now to address the partial truth in the statement above. You can generate net capital losses from the sales of cards, which can then be carried forward to future years, but only if you can claim the cards you sold were being held by you as investments, and you consider and can show yourself to be an investor. If instead you treat your cards as hobby collectibles, and yourself as a collector, you cannot deduct any net capital losses from the sales of those collectible cards on your tax return, and there is no capital loss carryover for such hobby losses either. You still get to net your collectible losses against your collectible/hobby and all other types of capital gains first. It is only if you end up with net capital losses attributable to hobby collectibles that they are nondeductible, and cannot be carried over to future tax years. But yes, you are otherwise limited to an overall net capital loss deduction of only $3,000 per year for non-hobby/collectible losses, with any such excess non-hobby/collectible capital losses over that $3,000 limitation amount being carried forward to be used/deducted in future years, or if unused, lost at the taxpayer's passing.

[Peter_Spaeth]

Originally Posted by Dandor

There is the ability for deductions on a Schedule C and Schedule D. It gets a bit messy with collected tax, but it is based on profit. The IRS expects this 1099-K income on a Schedule C, but you can do it as short/long term capital gains for collectibles on a schedule D. Losses can be carried forward as well. Believe it is a maximum of $3000 applied to the next tax year.

Just keep detailed records and give it to your CPA. By asking this question, my advice is for you not to attempt to do your own taxes.

I am confused because in 49 you said that if you bought a card for 500 and sold it for 400, you still had to pay tax on the 400. But here you are saying what you owe is based on profit, which I assume would also include loss if that's what you have and indeed you mention a loss carryforward.

[BobC]

Originally Posted by Tabe

Can you count as expenses the actual cost of an item? Say you buy a jersey for $60 and sell it for $75 ($67 after Ebay fees) - do you count $7 in income or $67 or $75?

It doesn't matter if you file as a dealer, investor, or collector, you are always able to deduct the actual tax basis cost of an item, plus the direct costs/fees in acquiring it, in determining the net taxable profit or gain from its sale.