Ebay tax reporting drops from $20,000 to $600

[Ray Van]

So I was speaking with my tax advisor who validated that any sales below $1000 are not subject to Capital Gains tax in Canada. Collectibles are classified as Listed Personal Property (LPP) which is "personal use property that usually increases in value over time". Sales of these items are subject to capital gains tax unless the acquiring cost and selling price are both below $1000 for an individual item.

[Stampsfan]

Originally Posted by Ray Van

So I was speaking with my tax advisor who validated that any sales below $1000 are not subject to Capital Gains tax in Canada. Collectibles are classified as Listed Personal Property (LPP) which is "personal use property that usually increases in value over time". Sales of these items are subject to capital gains tax unless the acquiring cost and selling price are both below $1000 for an individual item.

Thanks for this. Been wondering about this for awhile.

Cheers...

[Stupe the Second Sacker]

Hello all...A lot of knowledge on this forum which is why I joined. Thank you for that.

I read this thread (well nearly all of it) with great interest as I am a long time collector that would like to begin to liquidate. This has become a more intimidating and daunting task than maybe it was 20 years ago and I'd like to do it with the least hassle and most profit. My collection was always intended to supplement retirement so it's important, I take the best avenue while liquidating.

Last week, I did meet with a tax professional. She was knowledgeable, but as you might guess not an expert on sports cards/memorabilia. She spelled out several options for me:

1) Starting a sole proprietorship. This would allow me all the Schedule C deductions I encounter, however, she discouraged this because of self employment taxes. She mentioned income here would be taxed at my normal income tax rate (24%).

2) Starting a partnership with my silent partner wife, who would then become co-owner of the business (not worried about that) and would avoid self employment taxes. All of the benefits of the sole but with added tax advantage.

3) Just be a collectibles seller on ebay, where I would be able to deduct shipping, fees, supplies. Not sure what else. But I would be taxed at the higher collectibles tax rate, which I believe she said was 28%

So my question here is two fold:

1) What do you think most sellers in our hobby on ebay do? Option #3?
2) Is the added expense and complexity of #2 worth it? I'll assume #1 isn't a viable option unless there is some hidden benefit I can't remember her mentioning.
3) Edited to add a 3rd question...so I guess it's now three-fold. Do you need a TIN to sell at card shows?

Thank you in advance! These are complicated times in our once simple hobby.

Bob

[Tyruscobb]

Originally Posted by Stupe the Second Sacker

Hello all...A lot of knowledge on this forum which is why I joined. Thank you for that.

I read this thread (well nearly all of it) with great interest as I am a long time collector that would like to begin to liquidate. This has become a more intimidating and daunting task than maybe it was 20 years ago and I'd like to do it with the least hassle and most profit. My collection was always intended to supplement retirement so it's important, I take the best avenue while liquidating.

Last week, I did meet with a tax professional. She was knowledgeable, but as you might guess not an expert on sports cards/memorabilia. She spelled out several options for me:

1) Starting a sole proprietorship. This would allow me all the Schedule C deductions I encounter, however, she discouraged this because of self employment taxes. She mentioned income here would be taxed at my normal income tax rate (24%).

2) Starting a partnership with my silent partner wife, who would then become co-owner of the business (not worried about that) and would avoid self employment taxes. All of the benefits of the sole but with added tax advantage.

3) Just be a collectibles seller on ebay, where I would be able to deduct shipping, fees, supplies. Not sure what else. But I would be taxed at the higher collectibles tax rate, which I believe she said was 28%

So my question here is two fold:

1) What do you think most sellers in our hobby on ebay do? Option #3?
2) Is the added expense and complexity of #2 worth it? I'll assume #1 isn't a viable option unless there is some hidden benefit I can't remember her mentioning.

Thank you in advance! These are complicated times in our once simple hobby.

Bob

Welcome to the forum. Great questions. Net54’s resident CPA, Bob C., will probably soon respond. He will probably thoroughly answer each question in great detail.

[Exhibitman]

"1) What do you think most sellers in our hobby on ebay do?"

Until this year, pocketed the proceeds and never declared the income.

[Stupe the Second Sacker]

Originally Posted by Exhibitman

"1) What do you think most sellers in our hobby on ebay do?"

Until this year, pocketed the proceeds and never declared the income.

I would guess that's not limited to eBay. Cash is king at card shows too and I've never been given a receipt or been charged sales tax.

[53toppscollector]

If you are looking to liquidate in the most time/cost effective manner possible, it may be worthwhile looking into consigners like Greg Morris Cards or Probstein or going to one of the big auction houses like Heritage or Goldin or one of the others. It obviously depends on what you have, how much you have, etc. But they will handle everything with regard to shipping to individual buyers, and it will simplify your tax bill as well.

Selling on ebay can be a huge hassle. Selling on the BST board here is easier. But if you are going to individually sell hundreds of cards, it will be a lot of work. You might save yourself a bit of money doing it yourself, because you arent paying consignment fees, but you also have to calculate how much your actual time is worth. Most people fail to consider what their own time is actually worth when trying to estimate something like this.

[Aquarian Sports Cards]

Originally Posted by Stupe the Second Sacker

I'd like to do it with the least hassle and most profit.

These are not quite mutually exclusive but maybe inversely proportionate.

[conor912]

Originally Posted by Aquarian Sports Cards

These are not quite mutually exclusive but maybe inversely proportionate.

+1

Least hassle or most profit……you can only choose one.