eBay 1099 issues

[ValKehl]

Originally Posted by raulus

Two observations for you here:

1) You should still be able to recover your basis, assuming you have some documentation about your original cost. At $50, I would probably even be comfortable with a recollection of about when and about how much you spent. So based on your example, your gain net of your selling costs would be $35. If your tax rate is 20%, then your tax is $7 (i.e. 20% of your gain of $35, with your gain calculated net of your selling costs of $15).

2) The federal tax rate is actually 28% for collectibles. And sometimes you get to pay an extra 3.8% for the net investment income tax, if your income exceeds certain thresholds. Plus extra for the state, unless you live in a state with zero income tax. So an extra 10% for me here in Oregon, for a total tax rate on my collectibles gains of ~42%.

Nicolo, I am not an income tax expert, but I know enough about income taxes to be dangerous, as the expression goes. As I understand it, the 28% federal tax rate you mention is the MAXIMUM tax rate on LONG-TERM gains on collectibles. If the highest tax rate on one's "ordinary" taxable income is less than 28%, then this lower rate also applies to one's L-T collectibles gains. My wife and I are retired and no longer have the income we once did. For 2022, the top rate (or top tax bracket) on our "ordinary" income was 22%, and this is the rate we paid on my L-T baseball card gains.