Quote:
Originally Posted by jethrod3
I wouldn't call it a fascination. I think it's more about questions regarding interpretation, questions about where the IRS could or really should draw the line, and questions about where some of us might fit in that are not dealers but maybe just most casual of sellers. We are probably talking about a figure somewhere in between the $75 and $30,000 you mentioned for the casual collector (non-dealer) that sets up occasionally at a card show, and probably much more skewed to the $75 side. Probably the guy that makes between a couple hundred dollar to maybe $1K after factoring in table costs.
So no, not likely to result in a death sentence. But officially, even for such events that parallel what you might make at an average garage sale (though admittedly most are not making money on what is sold at garage sales), I think given the current rules, not declaring what you made even as a non-dealer at a mom-and-pop tiny card show (if you made anything above basis at all) is still a violation of the tax law. It's a complicated mess for folks that buy large lots of stuff at auctions, keep 1 or 2 desired items, but try to sell the rest of the stuff so it doesn't accumulate in one's house. At a minimum, some records must be kept now, even for the most casual of sellers in that situation, because more than likely, you'll also want to sell those one or two items you may have purchased in those auctions, and in the end, you'll have to figure out basis and profit, even if those desired items may not get you more than, say, $100 if sold at a show. All of this makes me want to consider becoming a CPA when I retire from my current day job!
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Apologies if my response came across a little strong. Maybe as a CPA, it just seems pretty simple to me, because that's what I do every day. Similar posts around here from time to time asking about tax on a $10 gain on small sales probably stick in my memory a bit more than the usual bear, and lead to my supposition that there's a fascination with small potatoes.
The general concept shouldn't be that difficult, although if you are constantly buying and selling it might be a lot of recordkeeping work. When you buy stuff, keep track of what you paid for it. If you didn't keep track of it, then give it your best guess, and hopefully if the service calls you on it, you can explain how you estimated your basis. At the same time, it's hard to imagine that the service is going to invest the resources necessary to challenge you over a few bucks here and there. If it's anything substantial, then hopefully you have some solid records, and therefore you don't have to guess, and if they call you on it, then you can prove it.
I get that for everyone else who isn't a CPA, this is a PITA and not something they want to deal with, particularly because there's nothing like taxes to suck the joy out of everything. And that's probably why my clients pay me way too much to take care of a lot of this stuff for them, so they can focus on the fun.