Help!! Audited on my 2021 Taxes over baseball cards!!

[rhettyeakley]

Hopefully you didn’t try to report a “loss” and tried to take a ton of deductions to offset your regular income. I am not a CPA but that is always a bad idea.

I do use a CPA but they have been very upfront with me about what I am supposed to be doing and what is and isn’t allowed.

[bobbyw8469]

Originally Posted by rhettyeakley

Hopefully you didn’t try to report a “loss” and tried to take a ton of deductions to offset your regular income. I am not a CPA but that is always a bad idea.

I do use a CPA but they have been very upfront with me about what I am supposed to be doing and what is and isn’t allowed.

I did lose money on some cards. I took no deductions that weren't allowed. Bubble Mailers, PO Box, VCP subscription, Ebay fees, Paypal fees, etc.

[Snowman]

In my experience, most of the work is actually in being able to track down and produce all the records you need, regardless of whether you hire a CPA or not. I was audited several years back for poker winnings, and I handled everything myself. I would do the same again if I am ever audited for selling sports cards. But I also keep meticulous records and I don't try to write off shady shit.

[bobbyw8469]

Originally Posted by Snowman

In my experience, most of the work is actually in being able to track down and produce all the records you need, regardless of whether you hire a CPA or not. I was audited several years back for poker winnings, and I handled everything myself. I would do the same again if I am ever audited for selling sports cards. But I also keep meticulous records and I don't try to write off shady shit.

I don't write off shady shit, but my record keeping skills suck big time. About the only things I'm good at is saving old invoices. And even that is hit or miss.

[Snowman]

Originally Posted by bobbyw8469

I don't write off shady shit, but my record keeping skills suck big time. About the only things I'm good at is saving old invoices. And even that is hit or miss.

You should be OK then. You just need to download all your eBay activity and get your bank records for any accounts you use and all your receipts. You can request data from ebay. It takes a few days for them to create a downloadable report for you. But it will have everything you need, buying and selling, with all the fees itemized.

[Keith H. Thompson]

too expensive. Then a couple of years ago. I got a 1099-K from eBay reflecting 50K in sales. I immediately went to a CPA firm. There are many ways to deal with this, but we decided to go with Schedule C. As Calvindog points out, there is a ton of legwork, but there are also so many legitimate "expenses" including cost of inventory. And it gets easier and more routine every year.

[bobbyw8469]

Originally Posted by Keith H. Thompson

too expensive. Then a couple of years ago. I got a 1099-K from eBay reflecting 50K in sales. I immediately went to a CPA firm. There are many ways to deal with this, but we decided to go with Schedule C. As Calvindog points out, there is a ton of legwork, but there are also so many legitimate "expenses" including cost of inventory. And it gets easier and more routine every year.

I did schedule C as well....and that is what they didn't like....maybe they can't fathom selling 10 or so cards on Ebay and immediately being over their threshold.

[raulus]

Originally Posted by bobbyw8469

I did schedule C as well....and that is what they didn't like....maybe they can't fathom selling 10 or so cards on Ebay and immediately being over their threshold.

Fun!

Schedule C is appropriate if you are a dealer. It could be that they intend to poke at that a bit, just to make you prove that your approach to buying and selling meets the usual indicia of acting as a dealer.