I have a personal sport cards collection. I also have an ebay collectables store. I've decided to sell my personal collection in my ebay store. What do I need to do?

[vehder]

I've had a personal collection of sports cards that I have compiled over 40 years. I also have an ebay store that sells these types of items along with other stuff. In that business I keep normal records and receipts and deduct expenses as allowed by law etc, etc.
Now I have decided to part with my personal collection and my ebay store which has existed for over 15 years is the best place to do this. How should I treat this merchandise? If I sell on my ebay store I don't have receipts for at least 30 of the 40 years I was collecting so I can't deduct exact costs like I would other merchandise I sell there.  Do I estimate what these items cost me at time of purchase and list as expenses even though some of those purchases were made 40 years ago?
Alternately should I sell my personal collection to my company entity and then take a deduction at current value?
For discussion let's say purchase price was $10,000 but current value is estimated at $50,000. I estimate it will take a couple years to sell on ebay.
I also have a full time job and my ebay store is a sole proprietor so all these totals get plugged into the same taxes.

What's the best way to handle this?

[M-MTax]

Whatever you do DON'T sell the cards as merchandise.....you should get cap gains treatment and that's much better EVEN IF you have to use a $0 basis.

[ThomasM125]

If you acquired the cards as an investment as it sounds like you did, you could then sell them to the business at wholesale (what a card store would pay) and report the income as capital gain income. You would then sell the cards from the business on E-bay and report the sales proceeds as you normally would, and the cost of goods sold would be what you paid yourself for the cards.

You could estimate the cost of the cards and deduct that, but you would have to prepare a schedule to demonstrate how you came up with the estimate in case you were to be audited. You could research to find out how much cards have appreciated over the years involved to come up with an estimated cost. However, there is no guarantee the IRS would accept your estimate, especially if you had little documentation to support the purchase amount.