Another tax question- cost basis on old collections.
Long story short, I've been a 'collector' for many, many years. Of many things.
My life has become a bit overwhelmed with too much junk, so time to sell.
I understand that ebay is now issuing tax documents on any sales over 600, which presumably means I'll have to file whatever it sells for on my taxes.
How in the heck am I supposed to calculate cost basis- or provide evidence on cost basis- for a baseball card or stamp collection I assembled when i was 15, decades ago? If I sell a vinyl record I think I paid $9 for, how do I prove that in a tax situation?
I'd appreciate advice from people who actually know what the answers are because I'm a bit worried that if I sell off a few old collections and generate a meaningful but not huge sum of money (lets say $5k, whatever), I'm now on the hook for the whole amount, even though it may actually be a loss, factoring in, say, the price of baseball cards in the 1990s vs now?
dbfolks166mt
·3 years agoOthers have already provided good advice on determining what your COGs may be based on when you acquired the items. The recommendation to see an accountant at least once is a good one. As others noted everyone's situation is different based on personal factors that you probably do not want to post on a public forum.
The accountant can also help you determine the best accounting method to declare on your schedule C whether to use the inventory exception for small businesses and what other deductions may or may not apply to your taxes. How long have you held the cards, where were they stored will you be using part of your home to conduct the business, use of your vehicle, whether you should establish a separate business to sell of your items, i.e. a LLC.
luckythewinner
·4 years agoIf you do not know the cost basis, the cost basis is $0.
Remember, you also got DECADES of enjoyment out of this collection.
garry0219
·3 years agoAnd why should the Government benefit from someone's years of enjoyment and make money on when most likely you're selling at a LOSS? Seems to me once you figure in inflation you're losing. If you paid 10 dollars for something in 1980 and sell it for 12 dollars in 2023 trust me you didn't make 2 dollars. LOL
dbfolks166mt
·3 years agoAnd why should the Government benefit from someone's years of enjoyment and make money on when most likely you're selling at a LOSS? Seems to me once you figure in inflation you're losing. If you paid 10 dollars for something in 1980 and sell it for 12 dollars in 2023 trust me you didn't make 2 dollars. LOL
Be careful where you tread. 😄 The IRS does allow and makes adjustments for inflation every year. The end result of that is if applied to your assets the value of those assets increases year by year. Why do you think your property taxes increase every year or the amount of sales tax you pay increases proportionally as the cost of commodities increases?