The IRS has specific guidelines for determining if an activity is a hobby or business. This is an article that discusses when your hobby is a business or vice versa: When the IRS Classifies Your Business as a Hobby If your sale of collectible items is classified as a hobby by the IRS, then the excess of income over the cost of the collectibles sold will be taxable. However, hobby income is not subject to self-employment taxes. Also, the cost of the collectibles you sell and the expenses you incur can never be greater than the revenue received from their sale. Or in other words, you cannot take a hobby loss on your income tax return.
Collectibles are discussed in Internal Revenue Code Section 408(m). This code section lists items determined by law to be collectibles: work of art, rug or antique, metal or gem, stamp or coin, or alcoholic beverage. Are the collectibles you're selling included in this list? The IRS does not provide criteria about how to determine if an item you hold would be considered a collectible by the IRS if it's not on this list. However, income received from selling defined collectible items are classified as a long-term gain or loss.
To summarize, if the income you receive from selling collectibles is greater than the cost of those items and the expenses you incur in selling them, you will have taxable income that needs to be reported on your tax return. And finally, you would need to make an effort to determine the original cost or fair market value of the collectibles you're selling.
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