Tax question - capital gains tax on sale of collectible 2 2

[Brian48]

I'm in the unfortunate position of having to pay capital gains tax this year for a sale of a collectible.  This leads to a question where I just can't seem to find a clear answer.  Is there a threshold amount before an item is reportable or do I have to lump the sale of all collectibles into one amount when reporting?  I.e. if I sold a book or sports card for $100k, I know I need to report the capital gains on the 100k sale, but what about all the smaller $10, $20, $50 sales I made throughout the year?  Do I need to sum all these little sales for year or is (in this hypothetical example) only items sold $100k and above?  FYI, I do not have a 1099 for the sale. Thx for any help.  

[ADAMANTIUM]

@NewWorldOrder

On 3/22/2024 at 12:00 PM, Brian48 said:

I'm in the unfortunate position of having to pay capital gains tax this year for a sale of a collectible.  This leads to a question where I just can't seem to find a clear answer.  Is there a threshold amount before an item is reportable or do I have to lump the sale of all collectibles into one amount when reporting?  I.e. if I sold a book or sports card for $100k, I know I need to report the capital gains on the 100k sale, but what about all the smaller $10, $20, $50 sales I made throughout the year?  Do I need to sum all these little sales for year or is (in this hypothetical example) only items sold $100k and above?  FYI, I do not have a 1099 for the sale. Thx for any help.  

Served on a plate. Do your stuff.

Regardless of thresholds you need to pay taxes, thresholds are just for online formats with forms to be sent out, and beyond that talk to a tax professional.

 

Edited March 22 by ADAMANTIUM

[Semicentennial]

Yup.  It should be reported.  When I sold on ebay, I sold about 150 books.  I had a spreadsheet listing what I sold, minus my cost and expenses, and listed then for gains.   

[Brian48]

Sigh

[ADAMANTIUM]

On 3/14/2024 at 5:41 PM, Buzzetta said:

$5000

https://www.irs.gov/newsroom/irs-announces-2023-form-1099-k-reporting-threshold-delay-for-third-party-platform-payments-plans-for-a-5000-threshold-in-2024-to-phase-in-implementation

all income is taxable and should be reported.

the threshold is just so that you can expect a form to submit as part of your taxes, which there is a whole thread about.

It has changed from year to year, and that thread (as far as I'm concerned) is just to use the form, wait for it and use on taxes, and nothing else; regardless, all income should be reported.

I guess I'll eat my shoe now, as I thought that was an obvious statement that got repeated over and again in the other thread, but I guess it needs restating. 

All APOLOGIES @NewWorldOrder continue to beat the drum slowly  

 

 

On 3/14/2024 at 5:41 PM, Buzzetta said:

$5000

https://www.irs.gov/newsroom/irs-announces-2023-form-1099-k-reporting-threshold-delay-for-third-party-platform-payments-plans-for-a-5000-threshold-in-2024-to-phase-in-implementation

 

[ADAMANTIUM]

On 3/22/2024 at 12:08 PM, Brian48 said:

Sigh

 I know I know, such is life. I didn't bring that specific detail up in the thread in my post above, but thresholds HAVE CHANGED, if you need to wait for the form.

Everywhere that Threshold topic went, a post "regardless pay taxes" was sure to follow, regardless of if it was the topic of a person's post  I had my fill and tried to reiterate that we got the point,

and yet here I am eating crow  

Such is life  we all have to pay our dues if we want to sing the blues, and we know it don't come easy! 

[FigaroToe]

I'm currently doing my 1099-K expenses now...I really need to set aside money for yearly taxes lol. But yes, all income you make should be reported regardless of amount. If you sold it on eBay, the IRS has that info so you most likely should report it.

[Lightning55]

On 3/22/2024 at 1:00 PM, Brian48 said:

I'm in the unfortunate position of having to pay capital gains tax this year for a sale of a collectible.  This leads to a question where I just can't seem to find a clear answer.  Is there a threshold amount before an item is reportable or do I have to lump the sale of all collectibles into one amount when reporting?  I.e. if I sold a book or sports card for $100k, I know I need to report the capital gains on the 100k sale, but what about all the smaller $10, $20, $50 sales I made throughout the year?  Do I need to sum all these little sales for year or is (in this hypothetical example) only items sold $100k and above?  FYI, I do not have a 1099 for the sale. Thx for any help.  

If you sold multiple things during the year, you could alternatively report as a small business under Schedule C.

You may be better able to include expenses related to the sales, such as storage, professional fees, grading costs, shipping, utilities, etc. The net profit will be added to your earned income, but depending on your circumstances, the tax rate may be lower.

Capital Gains on Collectibles is at a higher rate than general Capital Gains. 

But always get tax advice from a tax professional.

[Lightning55]

The "proposed" $5,000 reporting threshold is for Tax Year 2024, forms to be sent in 2025. Nothing to do with Tax Year 2023.

[Brian48]

Well, ran all the numbers though the tax software.  I didn't sell a lot of items over the year, but what I did sell added up to quite a bit.  This is gonna be a realbutt hurt for me.  

[Dr. Balls]

Ehh, nevermind - I'm not really adding anything to your question.

Edited March 22 by Dr. Balls

[shadroch]

On 3/22/2024 at 10:08 AM, Brian48 said:

Sigh

You are Even Steven if you sold ten items, five for a profit and five for a loss.  Hope for an investigator with a sense of humor.

[jharvey]

On 3/22/2024 at 12:50 PM, Lightning55 said:

Capital Gains on Collectibles is at a higher rate than general Capital Gains. 

Not always. It depends on how long you held the item before resale (long term or short term capital gain), and also what your ordinary income tax rate is. Long-term capital gains on collectibles are taxed at the LOWER of your ordinary income tax rate or 28%.

Here is some more detailed info copied over from a webpage:

Long-term gains from the sale of collectibles can be hit with a capital gains tax as high as 28%. 
If your ordinary tax rate is lower than 28%, then that rate will apply. 
But if you're in a higher tax bracket (i.e., 32%, 35% or 37%), 
then the capital gains tax on your collectible gains is capped at 28%.

The 28% limit doesn't apply to short-term capital gains. 
So, if you don't own a collectible for at least one year before selling it, 
you'll still be taxed on any gain at your ordinary tax rate (between 10% and 37%).

 

Edited March 23 by jharvey