How report income for buying/selling baseball cards

[rwom1217]

I purchased and sold some sports cards on ebay back in 2020.  I recently realized I needed to report this income, so am amending to do so.  I made money on some, lost on others.  When reporting the investment income, is it as simple as subtracting the total amount I paid from what they sold for to get the amount I gained (is it just a net number of all the transactions combined)?   Also, are shipping costs I paid to get them, or that they paid a factor?

[Bsch4477]

You will be completing Schedule C. Yes, your income is the net between profit and loss. Deduct shipping cost as an expense. 

[Mike9241]

are you in the business of buying and selling sports cards? 

if you're not in the business you are selling collectibles which get reported on schedule D 

When selling sports cards, whether they are reported on Schedule D or Schedule C depends on how you treat them for tax purposes. Here’s the breakdown:

1. Schedule D (Capital Gains and Losses):

   • If you treat your sports cards as an investment, you’ll report the sales on Schedule D (Form 1040). This form is used for “the sale or exchange of a capital asset not reported on another form or schedule.”
   • Capital gains tax rates apply to these sales. You’ll pay lower tax rates on long-term investments (held for over a year) than on cards sold within...¹.

2. Schedule C (Profit or Loss from Business):

   • If you consider your sports card activity as a business (e.g., buying and selling regularly), you should file a Schedule C.
   • Treating your cards as a business allows you to deduct business-related expenses but also subjects you to self-employment taxes.

[rwom1217]

Schedule D is likely more accurate as I considered them as either investment or for a collection rather than regular income.  In this case, is the gain still calculated as the net spent vs net sold of all the cards combined?  Do I factor in shipping costs?

[Hal_Al · Accepted solution]

Q. Schedule D is likely more accurate as I considered them as either investment or for a collection rather than regular income. 

A. I agree.  In the TurboTax interview, be sure to identify the category of investments as "collectibles," which are taxed at a higher maximum rate than ordinary investments. 

Q. In this case, is the gain still calculated as the net spent vs net sold of all the cards combined?

A. Yes,  collectible losses can be netted against other collectible gains during the same year.  But, losses by collectors from sales  cannot offset other categories of capital gains (if you have a net loss, you do not get a deduction). 

References:

https://stamps.org/news/c/collecting-insights/cat/ap-bonus-content/post/tax-strategies-for-owners-of...

https://www.thetaxadviser.com/issues/2019/nov/taxation-collectibles.html

Q. Do I factor in shipping costs?

A. Yes. Enter as expenses of sale. 

[rwom1217]

It did not ask about them being collectibles in the interview.  Is this because it's amending 2020?