Hello! I am a collector of action figures and have amassed quite a few over the years. I routinely had bought and sold (usually at a loss when it was all said and done after fees and shipping) compared to what I usually paid. I know that since I collect and sell high end (expensive) figures that I will hit the thresholds. What do I need to have prepared to show that I took a loss on these? I intentionally don’t sell over what I paid for things so that I don’t take a profit as the intent of me selling them is to buy different ones not run a business or make a profit.
I am curious about this too. I do the same thing with music instruments, I buy them and usually sell the ones I don't use so I can fund the purchase of others. Pretty much every one I sold was less than what I paid, I'm wanting to know what will I need to do to document all these sales and calculate tax owed.
Eg: will I total all the sales together and calculate a profit or loss for the 1099-K form? If I'm at a loss, will this offset my total income and lower my overall tax owed? I have also sold odd items from around my house, will I also add these into the same form?