Help with K-1099 and Reporting of eBay Sales - Collectible Funko Pop Reselling Tax Question

This is a common situation for collectors who sell off parts of their collection. Based on what you've described, this would generally be considered hobby income rather than business income. Here's why: You didn't buy the items with the intent to make a profit - they were for your personal collection. You're selling to make space, not as an ongoing profit-seeking activity. You're experiencing overall losses when accounting for your original purchase costs. For tax reporting, you'll need to report the gross income on Schedule 1, Line 8z as "Other Income" and describe it as "Hobby Income." The tricky part is that since 2018's tax law changes, hobby expenses are no longer deductible as miscellaneous itemized deductions. However, you should still document all your costs in case you're ever questioned. The K-1099 (which is actually just called a 1099-K) will be reported to the IRS showing your gross sales. Keep your spreadsheet and any documentation of original purchase prices as evidence that these were personal items sold at a loss. If you continue selling regularly and start purchasing items specifically to resell at a profit, the classification might shift to a business, which would be reported on Schedule C.

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Hey OP, I've been selling collectibles for years and the key to avoiding tax problems is properly tracking your "basis" (what you paid) in each item. For your Funko collection situation: 1. Keep that spreadsheet forever! Make backups! 2. Take photos of any price stickers still on boxes 3. Find old credit card statements if possible 4. For items without receipts, search eBay "sold items" history to find comparable sales from when you bought them Also, don't panic about the K-1099. The IRS knows that the gross amount isn't all profit. Many collectors are in this exact situation.

Make sure you understand the difference between personal items, hobby sales, and business income. Each has different tax implications: Personal items: If sold for less than you paid, generally no tax impact. If sold for more, could be capital gains. Hobby income: Report full amount on Schedule 1, but post-2018 you can't deduct expenses (which sucks). Business income: Report on Schedule C, can deduct all legitimate expenses, but you'll owe self-employment tax. Your situation sounds like a mix of personal items and hobby sales. Document everything!!

I'm dealing with a very similar situation! I've been selling off my vintage video game collection on eBay after years of collecting, and I'm so confused about how to handle this tax-wise. Like you, most of my sales are actually losses when I compare what I originally paid versus what I'm getting now. One thing that's been helpful is creating a simple three-column spreadsheet: Original Purchase Price | Sale Price | Net Gain/Loss. This makes it crystal clear that even though eBay will report the gross sales on the 1099-K, the actual taxable amount should be much lower. I've been reading through all these comments and it sounds like the key is having good documentation. I wish I had kept better records over the years, but I'm doing my best to reconstruct what I can using old credit card statements and checking price history on sites like PriceCharting for video games. The hobby vs. personal property distinction seems really important here. Since you collected these for personal enjoyment and are selling due to space constraints (not to make a profit), it sounds like you have a strong case for treating many of these as personal property sales rather than hobby income. Definitely keep that detailed spreadsheet - it shows you're being thorough and honest about tracking actual gains and losses.