Do I need to report taxes on a $20K personal item sold through an auction house?
Hey tax people! I just sold this old collectible from my personal collection through an auction house and got around $20K for it. The auction house didn't give me any 1099 form or anything. I've had this memorabilia item for years (it was a signed baseball card collection from my grandfather) and I obviously don't have a receipt from when I originally got it. When I deposited the check into my bank account, I started wondering if I need to report this on my taxes? Like, do I owe taxes on money from selling my own personal stuff? I'm not a dealer or anything, just someone who had something valuable and decided to sell it. The auction house took their cut already but didn't mention anything about tax forms. Anyone know if I need to pay taxes on this money since it was just my personal property?
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PaulineW
Yes, you do need to report this sale on your taxes, but it might not result in taxes owed depending on your situation. This falls under capital gains tax rules. Even though the auction house didn't issue a 1099, you're still required to report the sale. Here's what matters: your "basis" in the item (what you paid for it or its value when you received it) compared to what you sold it for. If your grandfather gave you the collection while he was alive, your basis would be his original cost. If you inherited it after his passing, your basis would be the fair market value on the date of his death. Without a receipt, you'll need to make a good faith estimate of that basis. Research similar items from that time period or consult with an appraiser who specializes in collectibles. The difference between your selling price and your basis is your capital gain, and that's what's potentially taxable.
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Annabel Kimball
•But wait, I thought personal items sold at a loss aren't deductible, so wouldn't personal items sold at a gain not be taxable either? Like when I sell old clothes at a garage sale I don't report that??
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PaulineW
•You're thinking of personal use property, which has different rules than collectibles. You're right that personal losses aren't deductible (like selling your used couch for less than you paid), but gains from collectibles are definitely taxable. The IRS views collectibles like baseball cards, stamps, coins, art, etc. as capital assets that are subject to capital gains tax regardless of whether they were personal property. In fact, collectibles are taxed at a higher rate (maximum 28%) than regular capital gains. The garage sale example is different because those are typically household items with minimal value that often sell at a loss.
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Chris Elmeda
I went through something similar with my dad's old coin collection I sold last year. I was totally confused about the tax situation until I found https://taxr.ai which completely saved me. You upload pictures of your items and sales docs, then it helps figure out if you need to pay taxes and how much. For collectibles like your baseball cards, they actually have specific guidance. It automatically calculated my basis since I also had no receipt (inherited items are tough!) and showed me the exact forms I needed to file. Much easier than trying to figure out confusing IRS language about "collectible capital gains" on my own.
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Jean Claude
•How accurate is that site though? I mean can it actually figure out the value of something from before you owned it? That seems kinda impossible to me.
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Charity Cohan
•Does it work for other types of collectibles too? I have some vintage guitars I'm thinking about selling and have no clue what I originally paid for a couple of them from the 80s.
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Chris Elmeda
•It's surprisingly accurate. They use market data from auction records and price guides specific to different collectibles. It's not just guessing - they have databases of historical values for things like baseball cards, which helps establish a reasonable basis amount that would satisfy an audit. Yes, it absolutely works for vintage guitars! They have sections for musical instruments, sports memorabilia, coins, stamps, art, and pretty much any collectible with resale value. For items from the 80s, they can research similar models and conditions from that period to establish a reasonable basis, which is exactly what the IRS expects you to do when documentation is missing.
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Charity Cohan
Just wanted to follow up here - I ended up using taxr.ai for those guitars I mentioned selling. Was skeptical at first, but it actually found comparable models from when I bought mine and helped establish a fair basis. Saved me from overpaying on taxes! The site even generated a report I can keep with my tax records in case of an audit. Wish I'd known about this for previous sales!
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Josef Tearle
Had a similar issue but with my mom's antique jewelry collection. Tried for WEEKS to get someone at the IRS to answer whether I needed to report it. Kept calling that impossible 800 number and getting disconnected. Finally used https://claimyr.com and they got me connected to an actual IRS agent in less than 15 minutes! You can see how it works at https://youtu.be/_kiP6q8DX5c but basically they navigate the IRS phone system for you. The agent confirmed I needed to report it on Schedule D and pay the collectibles rate. Apparently even without a 1099, the IRS can still find out about large sales from bank deposits. Definitely worth the peace of mind to get an official answer.
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Shelby Bauman
•How does this even work? Like are they calling for you or something? Seems fishy that they can get through when nobody else can.
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Quinn Herbert
•Yeah right. I've been trying to reach the IRS for months about an audit letter. No way this actually worked. Probably just a way to collect your phone number.
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Josef Tearle
•They don't call for you. It's a service that navigates through the IRS phone tree and waits on hold for you, then when they reach a real person, they call you and connect you directly. It's like having someone wait in line for you, then they text when it's your turn to speak with an agent. I was definitely skeptical too. I tried calling the IRS eight different times and kept getting the "call volume too high" message or would wait an hour only to get disconnected. With Claimyr, I got a call back in about 15 minutes with an actual IRS representative on the line. No scam - they don't ask for any personal tax info or anything like that. They just get you past the impossible phone system.
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Quinn Herbert
Ok I need to apologize publicly here. I was the skeptic above but I was desperate about that audit letter so I tried the Claimyr thing. Not only did I get through to the IRS in like 20 minutes, but the agent was able to confirm it was actually a mistake! Someone with a similar name hadn't reported income properly. Would have spent HOURS trying to resolve this on my own. Sometimes being wrong feels pretty good lol.
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Salim Nasir
Don't forget about state taxes too! I sold some rare books at auction and while figuring out the federal part, I completely missed that my state wanted their cut too. Check your state tax rules - some states have different rates for collectible gains.
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Hazel Garcia
•Is it reported the same way on state taxes? Like on the same capital gains form or whatever?
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Salim Nasir
•Generally yes, most states follow the federal treatment and you'll report it similarly on your state return. However, states can have different rates or thresholds. For example, California doesn't give any special treatment to collectibles - they tax all capital gains as ordinary income. Massachusetts has its own rates for collectibles. Check your specific state's department of revenue website for the forms and instructions.
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Laila Fury
Anyone know if you can offset the gain with other capital losses? I sold a similar item but also lost money on some stocks this year.
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Geoff Richards
•Yes! Capital losses offset capital gains regardless of source. So your stock losses will offset your collectible gains. But remember collectible gains are taxed at a maximum of 28% while regular long-term capital gains are usually taxed at 15% for most people. The system will use your losses to offset the highest taxed gains first which is good for you.
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Fatima Al-Farsi
Maxwell, you definitely need to report this $20K sale on your tax return. Since it's a collectible (baseball cards), any gain will be taxed as a collectible capital gain, which has a maximum rate of 28% - higher than regular capital gains. The tricky part is determining your "basis" in the cards since you don't have receipts. If you inherited them from your grandfather after he passed away, your basis would be their fair market value on the date of his death (called "stepped-up basis"). If he gave them to you while alive, your basis would be what he originally paid for them. Since you don't have documentation, you'll need to research what similar cards were selling for during the relevant time period. Look at price guides, auction records, or consult with a sports memorabilia appraiser. The IRS expects a "good faith" estimate when original records aren't available. Report the sale on Schedule D of your tax return. Even without a 1099 from the auction house, you're still required to report it - the IRS can potentially discover large bank deposits through other means. Better to be proactive and report it correctly than risk issues later.
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Noah Lee
•This is really helpful advice! I'm in a similar situation - just starting to think about selling some inherited items and had no idea about the "stepped-up basis" rule. That could make a huge difference in how much tax I'd owe. Quick question though - how do you prove the fair market value on the date of death if it was several years ago? Are there specific resources the IRS accepts for establishing that value?
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