A guide to reporting your taxes and Form 1099s

[HoustonCPA]

Originally Posted by Wings

Such a helpful thread!

If I buy a lot of 3 cards for $100, can I assign an expense to each of the cards according to what I calculated (say $60 $30 and $10) on the lot or do I have to assign each card an even expense of $33?

You can use either method. You just need to be consistent in applying the method you choose and can justify it if questioned.

[HoustonCPA]

Originally Posted by boxbuster7

Earlier I think you said it is easier to claim the COMC sales after cashing out from COMC, to avoid paying twice on the same income. Does that mean it is ok to not claim it, until cashing out?

Yes. Income from consignment sales generally do not get reported until you have received payment from the consignment seller (in this case COMC). The same would be true if you used probstein123 from eBay to sell your cards.

Originally Posted by boxbuster7

And just to be clear, all hobby PROFIT from income is taxable, right? I know the whole hobby vs business thing, but my hobby usually loses money. And if it made a profit, it would be taxed as capital gains because we are talking about collectibles. Right?

Thanks again!

All hobby INCOME is taxable. It's just a matter of if you can take any deductions that would reduce your personal taxable income. The first limitation is that you can only "deduct" up to your hobby income; much like you can only deduct up to your gambling income in a given year. The second limitation is if your allowable deductions exceed 2% of your AGI since your deductions only get reported on your Schedule A while the income is reported on page 1 of your 1040. The third limitation is if you itemize; if you don't, no deduction of expenses is allowed while you still have to report 100% of your hobby income.

I doubt the IRS would allow capital gains taxes unless we're talking about the T206 Honus Wagner.

[boxbuster7]

Thank you very much HoustonCPA, Great info that I am sure most COMC sellers here will use. Much much appreciated!

[Tsquared8]

What if ur just doing a one time sale? My fiancé and I are looking for a house and I'm planning on selling my collection on COMC and cashing out. As I clearly don't have receipts from everything I've collected from the 80's til present and it not a business and I'm not card flipping it's literally just a one time deal, how does that affect taxes?

[HoustonCPA]

Originally Posted by Tsquared8

What if ur just doing a one time sale? My fiancé and I are looking for a house and I'm planning on selling my collection on COMC and cashing out. As I clearly don't have receipts from everything I've collected from the 80's til present and it not a business and I'm not card flipping it's literally just a one time deal, how does that affect taxes?

Technically it doesn't affect anything. Hobby income is hobby income despite the number of items you sell or how often you sell. It's up to you as to how comfortable you are with not reporting the income. Much akin to the choice of going 71 mph in a 70 mph zone which is technically speeding.

[Screamer]

Subscribed; t/y

[bagman1960]

A recent thread on BO: What do you do with all those Bowmans? One response was use these cards as fillers. I sometimes do.

Question: Can these "fillers" be considered an expense?

[HoustonCPA]

Originally Posted by bagman1960

A recent thread on BO: What do you do with all those Bowmans? One response was use these cards as fillers. I sometimes do.

Question: Can these "fillers" be considered an expense?

Yes. You can deduct those along with the cost of top loaders, penny sleeves, and team bags.

[bagman1960]

Originally Posted by HoustonCPA

Yes. You can deduct those along with the cost of top loaders, penny sleeves, and team bags.

Thank you.

One more question:

For the filler cards, I can deduct the cost of the cards or flea market value?

[HoustonCPA]

Originally Posted by bagman1960

Thank you.

One more question:

For the filler cards, I can deduct the cost of the cards or flea market value?

You can deduct the cost. Flea market or thrift store value only applies to charitable contributions of cards.

[bagman1960]

Originally Posted by HoustonCPA

You can deduct the cost. Flea market or thrift store value only applies to charitable contributions of cards.

Thanks again.

[Cactuspies]

not exactly pp related but might be for some if they got it. what the heck do I do w/a 1099-K? I've tried a few different things and researched via the IRS and they say to add it on the Schedule C, but that just takes me to being a business owner and having to put in all my business costs and what not which I don't have. I got the 1099-K from Ubereats fwiw.

[HoustonCPA]

Originally Posted by Cactuspies

not exactly pp related but might be for some if they got it. what the heck do I do w/a 1099-K? I've tried a few different things and researched via the IRS and they say to add it on the Schedule C, but that just takes me to being a business owner and having to put in all my business costs and what not which I don't have. I got the 1099-K from Ubereats fwiw.

So you drive for Ubereats as a side job, and you received a 1099-K for your income from driving for Ubereats? A 1099-K is treated the same as a 1099. All income gets reported on Schedule C, and any expenses you had while driving for Ubereats that was not reimbursed is a deduction; if you had none like you claim, then that portion of the Schedule C would be blank. Deductible expenses could be a mileage deduction, any special licensing fees needed to drive for them, the cost of any background checks needed, a pro-rata cost of your cell phone unless you used theirs, parking and toll fees, etc.

When you drive for Uber, you are considered a contractor which is why you receive a 1099 and not a W-2. As a contractor, you are considered to be your own business which is why you would report it on Schedule C.

[Cactuspies]

Originally Posted by HoustonCPA

So you drive for Ubereats as a side job, and you received a 1099-K for your income from driving for Ubereats? A 1099-K is treated the same as a 1099. All income gets reported on Schedule C, and any expenses you had while driving for Ubereats that was not reimbursed is a deduction; if you had none like you claim, then that portion of the Schedule C would be blank. Deductible expenses could be a mileage deduction, any special licensing fees needed to drive for them, the cost of any background checks needed, a pro-rata cost of your cell phone unless you used theirs, parking and toll fees, etc.

When you drive for Uber, you are considered a contractor which is why you receive a 1099 and not a W-2. As a contractor, you are considered to be your own business which is why you would report it on Schedule C.

Thank you for the info. I received a 1099-Misc from one place I did some at home work stuff for, and this 1099-k from uber because I made under $600, I'm still waiting on a 1099 from grubhub. I was playing around a little more online and of course I stopped tracking mileage at one point (forgot to record it when I started out way too many times) but can estimate it pretty well based on knowing where I was before and after each delivery, at least for grubhub and just a good average of each work shift in general. I do have all my gas receipts. I think I might have to actually see a professional this year I know this wasn't your intent on this thread, so I'll bow out now and thank you again for the help.

[Branesergen]

So I kind of glanced at my taxes and am overwhelmed lol So before I sit down and spend about 100 hours (my recordkeeping for last year was horrible, keeping up with it this year!) trying to figure this out, I figured I will ask the most important question (to me) here.

I sold $100,000 worth of stock last year to get this venture going, I've also made $36,000 thru Paypal and $14,000 elsewhere for a total of $150,000. My question is can I itemize (thru receipts I do have, ebay and paypal) into the $100,000, or can I only go to the Paypal and elsewhere total ($50,000). If its needed to know - The only thing stating I'm a business right now is my Tax ID Re-sellers License. Thanks! I am not looking forward to this.

[HoustonCPA]

Originally Posted by Branesergen

I sold $100,000 worth of stock last year to get this venture going, I've also made $36,000 thru Paypal and $14,000 elsewhere for a total of $150,000. My question is can I itemize (thru receipts I do have, ebay and paypal) into the $100,000, or can I only go to the Paypal and elsewhere total ($50,000). If its needed to know - The only thing stating I'm a business right now is my Tax ID Re-sellers License. Thanks! I am not looking forward to this.

When you say "itemize" are you talking about treating your expenses related to Paypal/eBay as an itemized deduction on your Schedule A? If so, then you can only deduct up to your hobby income which would be $50,000. The $100,000 even though it was used to jump start this venture would be investment income. If you truly used $100,000 to start this venture, then you should probably be treating this as a business in which case you would not itemize your expenses, they would just go on Schedule C.

[Branesergen]

Originally Posted by HoustonCPA

When you say "itemize" are you talking about treating your expenses related to Paypal/eBay as an itemized deduction on your Schedule A? If so, then you can only deduct up to your hobby income which would be $50,000. The $100,000 even though it was used to jump start this venture would be investment income. If you truly used $100,000 to start this venture, then you should probably be treating this as a business in which case you would not itemize your expenses, they would just go on Schedule C.

I just looked at the Schedule C and that's the one I'll be using. I'm probably using itemize wrong, I want to write off my expenses (purchases of cards, comics and supplies). I'm most likely going to see a CPA but I just want to eliminate as much work for them as I can when digging stuff out. this should be fun! lol I appreciate the response!

[coachnip13]

Originally Posted by Branesergen

I just looked at the Schedule C and that's the one I'll be using. I'm probably using itemize wrong, I want to write off my expenses (purchases of cards, comics and supplies). I'm most likely going to see a CPA but I just want to eliminate as much work for them as I can when digging stuff out. this should be fun! lol I appreciate the response!

Also, on the stock sale, do you know your cost basis? You will only pay tax on your gains.

[Branesergen]

Originally Posted by coachnip13

Also, on the stock sale, do you know your cost basis? You will only pay tax on your gains.

Good to know. I'll have to look into that. Was just going off the number on one of the 1099's. Thanks!

[estebahn73]

Why is that on TurboTax, in Miscellaneous Income - Hobby Income and Expense - I put same amount for both income and expense and yet I get taxed on the income??

[HoustonCPA]

Originally Posted by estebahn73

Why is that on TurboTax, in Miscellaneous Income - Hobby Income and Expense - I put same amount for both income and expense and yet I get taxed on the income??

Hobby expenses are limited to hobby income and are treated as an itemized deduction subject to 2% of your AGI.

For example: You have an AGI of $100,000. Part of that $100,000 is $8,000 of hobby income. You incurred $10,000 of expenses.

1) You can only "deduct" $8,000 of hobby expenses as you are limited by the hobby income
2) Of the $8,000 in allowable expenses, only $6,000 will be treated as an itemized deduction ($100,000 AGI * 2% limitation = $2,000 threshold)
3) If you are single and have no other itemized deductions, you will use the $6,300 standard deduction as the $6,300 is higher than the $6,000 of hobby expenses
4) In essence, you technically did not get any benefit from from the hobby expenses.

[HoustonCPA]

With the passing of the 2017 Tax Cuts and Jobs Act, most of you should experience a lower tax burden with a drop in the tax rates.

However, Section 11045 of the Act suspends all miscellaneous itemized deductions for individuals for tax years 2018 through 2025. That means that all of you that report your sports card income as hobby income will not be able to take any hobby deductions against that income. Only those operating as a business will be allowed to take a deduction against their income. If you were ever debating about getting more serious about treating your hobby as a business, 2018 is the year to start doing so.

Remember, in order to pass yourself off as a business, you will need to carry on your activities in a business like manner, have the expectation that you will eventually make money from your en devours, and show some success in making money (i.e. a profit) at least 3 times in a given 5 year period.


The 2017 personal income tax return you file by April of 2018 will be the last year in which you can include hobby expenses as a miscellaneous itemized deduction on Schedule A of your Form 1040.

[Screamer]

Originally Posted by HoustonCPA

With the passing of the 2017 Tax Cuts and Jobs Act, most of you should experience a lower tax burden with a drop in the tax rates.

However, Section 11045 of the Act suspends all miscellaneous itemized deductions for individuals for tax years 2018 through 2025. That means that all of you that report your sports card income as hobby income will not be able to take any hobby deductions against that income. Only those operating as a business will be allowed to take a deduction against their income. If you were ever debating about getting more serious about treating your hobby as a business, 2018 is the year to start doing so.

Remember, in order to pass yourself off as a business, you will need to carry on your activities in a business like manner, have the expectation that you will eventually make money from your en devours, and show some success in making money (i.e. a profit) at least 3 times in a given 5 year period.


The 2017 personal income tax return you file by April of 2018 will be the last year in which you can include hobby expenses as a miscellaneous itemized deduction on Schedule A of your Form 1040.

Awesome info; t/y

[JKTaylor]

Can someone point me to a good thread that discusses how you value your year end inventory if you are in the business? I tried searching but couldn't come up with anything good, but will continue to dig around.

As a small example, if I buy a $100 box that comes with 100 cards and I only get 1 hit that's worth $50 and the rest are paper duds, would I allocated the $100 over all 100 cards evenly to where the card I sold for $50 has a cost of $1 or do you do this differently? The rest may take 3-4 years before they can individually be sold for a few bucks each, but most will never amount to anything and be thrown away or sit on the shelf forever. If you leave these on the shelf, are you carrying $99 of inventory into the new year?

How do the guys that do this as a business handle these situations and how do you best approach valuing year end inventory?

[morningrushnc]

"It's alive! It's alive!"