Would I report the sale of trading cards I’ve been collecting as income, even if the sale resulted in a net loss?

by William R. Lazor, CPA | May 22, 2019

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If I were to sell trading cards I have been collecting for the past three years at a net loss, do I report that as income? Do I have to prove that it is net loss? If so, is there any way to do that without the receipts?

A sale of collectible items should be reported on your tax return. Any gain or loss is determined by the difference between the amount for which they are sold and the amount(s) which were paid for them when purchased. Records of both the sale and purchase must be kept to support the amounts reported. If no records exist for the purchase of the collectibles, then the basis for them is zero, and the proceeds received are taxed in their entirety. The transaction should also be identified as one entered for profit. Losses from hobby transactions are not deductible.

You should consult with a CPA when preparing your tax return for the year of the sale to receive advice specific to your situation.

For more resources, check out PICPA’s Money & Life Tips, Ask a CPA, or CPA Locator.

Answered by: William R. Lazor, CPA, is a partner/shareholder with Kronick Kalada Berdy & Company PC in Kingston, Pa. 

Disclaimer
The responses are based on the limited information provided by the questioner and apply the laws and regulations at the time of posting. Other options could arise as rules and regulations may change over time, including but not limited to the passage of the Tax Cuts and Jobs Act of 2017. They are intended to provide general information, not specific accounting or tax advice; they are not intended or written to be used and cannot be used for the purpose of avoiding or evading taxes or penalties under the IRS code or regulations. Views expressed do not imply an opinion of the PICPA, its officers, directors, employees, or members.
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