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?
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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://www.thetaxadviser.com/issues/2019/nov/taxation-collectibles.html
Q. Do I factor in shipping costs?
A. Yes. Enter as expenses of sale.
You will be completing Schedule C. Yes, your income is the net between profit and loss. Deduct shipping cost as an expense.
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:
Schedule D (Capital Gains and Losses):
Schedule C (Profit or Loss from Business):
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?
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://www.thetaxadviser.com/issues/2019/nov/taxation-collectibles.html
Q. Do I factor in shipping costs?
A. Yes. Enter as expenses of sale.
It did not ask about them being collectibles in the interview. Is this because it's amending 2020?
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