Friday, November 13, 2026Cards, designer toys, memorabilia and the people who deal in them
Independent collectors directory
A Trend News Group Company
Suggest a correction

Taxes on Collectibles: What the IRS Actually Says

2026-11-09 · By CollectorsTrend Editorial · General information, not appraisal, tax, legal or investment advice

A plain read of the IRS pages on selling collectibles: the 28% cap, the definition, 1099-K reporting, hobby or business, and records. Not tax advice.

A collector at a desk with receipts, a laptop and a box of trading cards while preparing a tax return

If you sell a card, a signed jersey or a rare figure for more than you paid, the IRS wants to hear about it. How much tax depends on how long you held it, what the IRS counts as a collectible, whether your selling looks like a hobby or a business, and what records you kept. This guide reads the IRS's own pages on each of those and stops there. It is not tax advice. Your situation has details we cannot see, so a CPA or enrolled agent should look at yours.

The holding period and the 28% cap

IRS Tax Topic 409 explains capital gains. It says that "if you hold the asset for more than one year before you dispose of it, your capital gain or loss is long-term." The same page says short-term gains are "subject to taxation as ordinary income at graduated tax rates." For most long-term gains, the page describes rates of 0%, 15% and 20% for tax year 2025. Then it lists the exceptions, including this one: "Net capital gains from selling collectibles (such as coins or art) are taxed at a maximum 28% rate."

Notice the word "maximum." IRS Publication 550 works an example: if all of your net capital gain comes from selling collectibles, "the capital gain rate would be 28%," but "if you are otherwise subject to a rate lower than 28%, the 28% rate does not apply." The 28% rate is a ceiling that can bind, not a flat rate in every case. Topic 409's page was last reviewed on November 9, 2026, and its rate tables are for 2025, so check the IRS site for the year you are filing.

What counts as a collectible

Topic 409 gives coins and art as examples and no broader list. The fuller definition sits in the Instructions for Schedule D (Form 1040) for 2025. There, a collectibles gain or loss is "any long-term gain or deductible long-term loss from the sale or exchange of a collectible that is a capital asset," and the instructions state: "Collectibles include works of art, rugs, antiques, metals (such as gold, silver, and platinum bullion), gems, stamps, coins, alcoholic beverages, and certain other tangible property."

Trading cards, autographs and toys are not named in that sentence. The phrase "certain other tangible property" is the part that decides whether an item falls under it, and we are not going to guess how the IRS treats a specific card or figure. That is a question for your preparer. If you do have collectibles gain, the instructions send you to a 28% Rate Gain Worksheet.

Gain, loss and personal-use items

Publication 550 says "property held for personal use only" is a capital asset and "you must report a gain from its sale as a capital gain. However, you cannot deduct a loss from selling personal use property." The practical reading, which you should confirm with a professional, is that a card you kept for enjoyment and sold at a loss does not produce a deductible loss, while a gain is reportable. The IRS's 1099-K page makes the same point in plain language about gains: you must report income "including personal items such as clothing or furniture sold at a gain."

Hobby or business

The IRS does not give a single test. Its page "Know the difference between a hobby and a business" lists questions to ask, including whether the activity is "conducted like a business," whether you "maintain complete and accurate books and records," whether you "intend to profit," whether you changed methods to improve profitability, and whether the activity is profitable in some years. It also says that if you are "not trying to make a profit," you "can't use a loss from the activity to offset other income," and that income from an activity with no profit motive is reported on Schedule 1 (Form 1040), line 8. The page points to Publication 535, Business Expenses, and Publication 334 for more. Someone who flips cards weekly with a spreadsheet and a business bank account is in a different place than someone selling a few duplicates from a childhood collection, and only a preparer can tell you where you land.

Form 1099-K: what IRS.gov says today

The reporting threshold for payment apps and marketplaces has changed more than once, so read the current page. The IRS page "Understanding your Form 1099-K," last reviewed October 28, 2026, says a payment app or online marketplace "is required to send you a Form 1099-K if the payments you received for goods or services total over $20,000 in more than 200 transactions." It adds that you "may receive a Form 1099-K even when total payments or transactions are less than the reporting threshold," and that sellers using card processors get one "no matter how many payments you got or how much they were for." Another IRS page lists a news item titled "IRS Issues FAQs on Form 1099-K threshold under the One, Big Beautiful Bill; dollar limit reverts to $20,000," dated November 17, 2025.

The key line for collectors: "Whether or not you receive a Form 1099-K, you must still report any income on your tax return." A missing form does not make a taxable sale disappear, and a form you receive in error has its own correction steps on IRS.gov.

Basis and records

Your gain is generally what you received minus your basis. Publication 550 says "the basis of property you buy is usually its cost," which it defines as "the amount you pay in cash, debt obligations, or other property or services." The IRS pages we read do not give a collector's checklist for records, so here is the practical side, stated as a habit and not as IRS wording: keep receipts, auction invoices, grading fees paid and shipping paid for each item or lot, and note the date you acquired it and the date and price you sold it. Inherited and gifted items can use different basis rules. Ask before you assume.

What to do next

  1. List what you sold this year, with dates and proceeds, and what you paid for each item.
  2. Collect any Form 1099-K and marketplace statements and compare them to your list.
  3. Decide, with a professional, whether your selling is a hobby or a business.
  4. Bring the list to a CPA or enrolled agent and ask how collectibles gain applies to what you sold.

Sources

General information only, not legal, tax, appraisal or investment advice. Prices, fees and policies change; confirm with the company or a qualified professional before you act.

Frequently asked questions

What is the maximum tax rate on collectibles?
IRS Tax Topic 409 says net capital gains from selling collectibles, such as coins or art, are taxed at a maximum 28% rate. It is a ceiling, and Publication 550 says that if your regular rate is lower than 28%, the 28% rate does not apply.
Do I need a 1099-K to report a sale?
No. The IRS says that whether or not you receive a Form 1099-K, you must still report any income on your tax return. As of its October 28, 2026 page, the threshold for payment apps and marketplaces is over $20,000 in more than 200 transactions.
Can I deduct a loss on a card I kept for fun?
Publication 550 says you cannot deduct a loss from selling personal use property, though you must report a gain. Whether an item counts as personal use or part of a business is a question for a tax professional.
Is my collecting a hobby or a business?
The IRS lists factors such as whether you keep complete books and records, intend to make a profit and run the activity like a business. There is no single test, so ask a CPA.

Looking for care near you? Browse providers by state and city, or tell us what you need and we will help you find options.

Find a provider · Ask for help

More on this site

General information only, not appraisal, tax, legal or investment advice. Prices, fees and policies change; confirm with the company or a qualified professional before you act. CollectorsTrend does not grade, authenticate, buy, sell or endorse any business listed. Sponsored placements are paid and always labeled.