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Posted By: Rhys

The bottom line is that it is all taxable if there is profit involved, the key is to figure out the best tax treatment of the sale. A flat sale of a collectible is taxed at a fairly high rate. If you do what Dan does (and I do) and file a Schedule C than you get to take a lot of deductions to offset the profits like gas money to shows, hotels at shows, admission costs, internet fees, ebay fees, paypal fees, etc. My only caveat would be to NOT take the business use of the home deduction. I specialized in Tax Law during Law School and worked for a short period for the IRS in Chicago. The one piece of advice I got over and over again is that Business use of the Home is the number one red flag for an audit. Even though I could get a big deduction for it, I have never filed it and I have never been audited. Not that there is anything wrong with taking it honestly but it is so abused that the IRS has really honed in on that one and it is not worth the trouble of an audit in most cases.

I am not in any way giving tax advice in a legal capacity, but the bottom line is that it IS taxable and you should figure out the best way for your personal situation to take care of it honestly and painlessly before the IRS could ever get involved and make it ugly and painful.

Rhys Yeakley