The most common misunderstanding about 1099-K trading card sales is that no form means no tax. It does not. The form is a reporting trigger for platforms, not the test of whether your income is taxable. The IRS puts it plainly: "Whether or not you receive a Form 1099-K, you must still report any income on your tax return."
What you owe depends on three things: whether each card sold at a gain or a loss, how long you held it, and whether your selling is a personal collection, an investment, a hobby or a business. The form answers none of those questions. Your records do.
Do you owe tax on card sales without a 1099-K?
You can. If you sold a card for more than you paid, that profit is generally taxable whether or not a form arrives. If you sold at a loss, you may owe nothing on that sale, but you need records to show it.
The IRS Form 1099-K FAQs state the baseline: "All income, no matter the amount, is taxable unless the tax law says it isn't." For personal items sold at a gain, the IRS says "your profit is taxable," with profit being the difference between what you received and what you originally paid.
What is the 1099-K threshold for card sellers?
For marketplaces and payment apps, the federal test is more than $20,000 in payments and more than 200 transactions. Both conditions must be met.
The IRS describes the trigger this way, and Sovos stresses that both parts apply. An October 2025 IRS release, now marked archival, says the One, Big, Beautiful Bill "retroactively reinstated" the threshold in effect before the American Rescue Plan Act of 2021.
Two hypothetical sellers show why the threshold is a poor guide to tax:
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The high-end seller: 12 graded cards sold for $30,000 total. That clears the dollar test but falls well short of 200 transactions, so the federal threshold does not require a form. Any gains are still reportable.
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The volume seller: 300 low-dollar sales totaling $15,000. That clears the transaction test but not the dollar test. Again, the threshold does not require a form, and the income question does not go away.
Sovos also reports that the revised 2026 form adds two tip-related boxes and a new layout. Those fields have no bearing on card sellers.
Can you get a 1099-K below the threshold?
Yes. The IRS says a seller "may receive a Form 1099-K even when total payments or transactions are less than the reporting threshold," and that a state "may have a lower reporting threshold."
On state rules, eBay's seller tax page lists these lower-threshold states for 2025 sales: Arkansas, the District of Columbia, Illinois, Maryland, Massachusetts, Missouri, Montana, New Jersey, Vermont and Virginia. It gives no dollar amounts and refers sellers to a tax advisor. Treat that as eBay's list for 2025 sales, not as a 2026 state list.
Payment cards work differently too. If you take payment cards directly, rather than through a marketplace or app, the IRS FAQs say "There is no threshold amount that must be met to receive a Form 1099-K due to payments" by payment card.
Is the 1099-K amount your taxable profit?
No. The form shows gross payments, not profit, so its total can overstate your income.
The IRS FAQs say the amount "doesn't include adjustments for fees, credits, refunds, shipping, cash equivalents or discounts." Of those items, the IRS's reporting guidance says: "These items are not taxable income. You can deduct them from the gross amount."
A hypothetical: you bought a card for $600 and sold it for $1,000, paying $130 in fees and $20 in outbound shipping. The form amount reflects the $1,000. Your profit on those figures is $250. Without proof of the $600, you cannot show what portion of the $1,000 is gain. That is the practical reason cost records matter more than the form.
Publication 544 subtracts selling expenses in a worked example, but that example is a building sale, and the text does not name marketplace fees. The 1099-K guidance above is the clearest IRS support for card sellers.
Are you a collector, investor, hobby seller or business?
This classification drives how gains and losses are treated, and the answer depends on your facts. The IRS text closest to collectors is a caution in Publication 525 that covers "stamps, coins, or other items." It does not name trading cards.
| Category | Gain | Loss | | --- | --- | --- | | Personal collection | Taxable as capital gain. Reported on Form 8949 and Schedule D. | Not deductible. The reported gross can be zeroed out. | | Held for investment | Taxable as capital gain. | Deductible as a capital loss, subject to annual limits. | | Hobby income | Publication 525 and the Taxpayer Advocate Service place hobby income on Schedule 1, line 8j. | Cannot offset other income, per FS-2022-38. | | Business | Schedule C. Publication 334 material says resellers subtract goods' cost from gross receipts and value inventory at the start and end of each year. | Use of a loss turns on profit motive. FS-2022-38 says an activity not run for profit cannot offset other income. |
Publication 525 draws the collector line this way: "if you sell items from your collection at a loss, you can't deduct the loss." It then contrasts items held for investment, "such as gold or silver bullion, coins, or gems," where a loss is deductible as a capital loss. Whether a given card was held for investment is not settled by that sentence.
On hobby versus business, the Taxpayer Advocate Service says: "The key consideration for the IRS is that businesses operate to make a profit while hobbies are for pleasure or recreation." IRS Fact Sheet FS-2022-38 lists questions that include:
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Is the activity run like a business?
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Do methods change to improve profitability?
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Is it a main source of income?
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Is it profitable in some years?
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Does it have elements of personal pleasure?
Under 26 U.S.C. 183(d), an activity is presumed to be for profit if gross income exceeds attributable deductions in 3 or more of 5 consecutive tax years ending with the current year, unless the IRS establishes otherwise.
Self-employment tax is another reason the label matters. The Taxpayer Advocate Service says "An individual whose net income is $400 or more is subject to self-employment tax and federal income tax," and that "Self-employment tax does not apply to the sale of personal items reported on Schedule D."
Where do hobby sellers report card sales?
IRS guidance is not uniform here, so no single rule fits every seller. Three sources point in different directions:
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The IRS 1099-K page lists "Gig worker, freelancer, hobby seller and other self-employed" as sole proprietors reporting on Schedule C.
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Publication 525 and the Taxpayer Advocate Service put hobby income on Schedule 1, line 8j.
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Publication 525 separately treats gain on selling items from a collection as capital gain.
Hobby expenses are a similar problem. 26 U.S.C. 67(h) bars miscellaneous itemized deductions for tax years beginning after Dec. 31, 2017, and a 2025 amendment removed the earlier end date. An archival IRS tax tip called hobby expenses miscellaneous itemized deductions that "can no longer be deducted." Publication 525 (2025) still says deductions are limited to the activity's income and taken only on Schedule A. Reading these together, Monaco CPA states that hobby operating expenses are not deductible. That is a practitioner's conclusion, not settled IRS language.
If you sit near these lines, this is a question for a tax professional, not a forum thread.
Do you pay tax on cards sold at a loss?
Generally not on the loss itself, but the treatment depends on your category. A personal collection loss cannot be deducted, while an investment loss can be, within limits.
The IRS says "A loss on the sale of a personal item can't be deducted from your taxes," but "you can zero out the reported gross income so you don't pay taxes on it." It lists two ways: the entry space at the top of Schedule 1, or Form 8949 carrying to Schedule D. If you had both winners and losers, the IRS says to "report losses and gains separately." A loss on one personal card does not simply net against a gain on another.
For deductible capital losses, Topic 409 limits the excess net loss usable against income to the lesser of $3,000 ($1,500 if married filing separately) or the net loss, with the remainder carried forward. None of that helps with personal-collection losses.
What tax rate applies to trading card gains?
It depends on the holding period. Cards held one year or less produce short-term results, and cards held more than one year are long-term, with a possible collectibles maximum of 28%.
Topic 409 says net short-term gains are taxed "as ordinary income at graduated tax rates" and collectibles gains "at a maximum 28% rate." That 28% is a ceiling, not a flat rate.
Whether cards are formally collectibles is an open point. 26 U.S.C. 1(h)(5) defines collectibles gain by reference to section 408(m), which lists art, rugs or antiques, metals or gems, stamps or coins, alcoholic beverages and other property specified by the Secretary. Trading cards are not named. Monaco CPA says the "prevailing practitioner position generally treats trading cards as collectibles," but that "no IRS or court ruling squarely classifies them." Plan around 28% as a maximum and as a practitioner position.
What records should card sellers keep?
Keep records for each card, covering both what it cost and what it netted. Topic 703 says "Basis is generally the amount you paid for the asset," raised by items such as improvements that add value. Publication 551 lists sales tax and freight among items that count toward cost, so purchase tax and inbound shipping are the natural analogues for cards.
Your per-card log should include:
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Purchase date and price paid
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Sales tax and inbound shipping
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Grading fees
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Sale date and gross sale price
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Marketplace fees and outbound shipping
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Refunds
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Source of any gifted or inherited card
Grading fees need care. Monaco CPA says "A supported grading payment may enter adjusted basis when the applicable capitalization and property rules require it," and that a dealer's unsold graded cards generally keep those costs in inventory basis. The IRS materials reviewed for this article do not name grading fees, so keep the receipt and ask your preparer. If you are deciding whether to grade before selling, our card grading break-even tool compares incremental net proceeds using costs you enter. It does not predict grades, current prices or investment returns.
Gifts and inheritances have their own basis rules. Per Publication 551, gift basis is generally the donor's adjusted basis, with a different loss rule if fair market value at the time of the gift was below that basis. Inherited property basis is generally fair market value at the date of death, or the alternate valuation date if elected.
On retention, Topic 305 says to keep supporting documents until the period of limitations expires for that return. Property records stay until the period expires for the year you dispose of the property: "You must keep these records to figure your basis for computing gain or loss." Tax is generally assessable for 3 years from filing, and 6 years for significant unreported income. For a card held a decade, that means keeping the purchase record for the whole hold and then some. Monaco CPA adds a warning for anyone planning to reconstruct costs from memory: "An unsupported estimate is not acceptable substantiation."
What if your 1099-K is wrong?
Go to the issuer, not the IRS. The IRS says to request a corrected form, keep the corrected form and your correspondence, and "Don't contact the IRS. We can't correct your Form 1099-K."
It also says "Don't wait to file your taxes," and to report the incorrect amount in the entry space at the top of Schedule 1.
What should a card seller do this week?
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Build the per-card log above for everything sold this year, starting with your largest sales.
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Find proof of cost now, while order histories and receipts are still easy to reach.
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Split your sales into gains and losses, and note whether each card was held more than one year.
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Decide honestly which category fits your activity, using the FS-2022-38 questions as a guide.
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If you are near the hobby and business line, sold at volume, or hold cards from gifts or estates, take the log to a tax professional.
Individual outcomes vary, and the guidance leaves real gaps for cards. A clean ledger will not settle every question, but it gives you and your preparer something to work from.
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Sources
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Publication 544, Sales and Other Dispositions of Assets (IRS)
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Know the difference between a hobby and a business, FS-2022-38 (IRS)
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Tips for taxpayers who make money from a hobby, Tax Tip 2019-85 (IRS, archival)
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IRS Releases Updated Form 1099-K and Accompanying Instructions (Sovos)
DISCLAIMER: PureGrail articles are for informational and entertainment purposes only. Nothing on this site constitutes financial, investment, or legal advice. Collectibles are speculative assets and values can decrease significantly. Always conduct your own research before buying or selling. Past price performance does not indicate future results.
Note: This article contains AI-assisted content and has been reviewed in our editorial workflow.