How to report a large sale that was paid with the Friends & Family PayPal option?

Last fall I sold a bunch of my vintage baseball cards to a buddy for around $8,100. He sent the payment through PayPal using the Friends & Family option to avoid fees. Now I'm stressing about tax season coming up and have no idea how to properly report this on my 2025 taxes. PayPal didn't send me any tax forms since it was through F&F, but I know the IRS still expects me to report income over certain thresholds. Do I need to report this sale? And if so, how do I document it when there's no official record from PayPal? I've heard different things about collector items and capital gains vs regular income. Any advice on the proper way to handle this would be super helpful!

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19 comments

Mateo Martinez

•8M

Yes, you need to report this sale regardless of how the payment was processed. PayPal Friends & Family doesn't generate a 1099-K, but that doesn't exempt you from reporting the income. For collectibles like baseball cards, this would typically be reported as a capital gain. You'll need to calculate your "basis" (what you originally paid for the cards plus any costs associated with their upkeep or authentication) and subtract that from your $8,100 sale price to determine your actual gain. Collectibles are generally taxed at a maximum rate of 28% rather than the normal capital gains rates. You'll report this on Schedule D of your tax return, and you should keep documentation of the sale (text messages, emails confirming the transaction, bank statements showing the deposit) in case of questions from the IRS. Even without a 1099-K, you're still legally required to report all income.

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Mateo Martinez

•8M

You'd pay tax on the $2,500 gain, which is the difference between your selling price and your basis (what you paid for it). The tax rate depends on your overall income and how long you owned the collection. If you owned it for more than a year, it would be taxed as a long-term capital gain at the collectibles rate, which is capped at 28% (but could be lower depending on your tax bracket). If you owned it for less than a year, it would be taxed as a short-term capital gain at your ordinary income tax rate.

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Aisha Rahman

•8M

I had a similar situation last year when I sold some rare comics through a private sale. I discovered taxr.ai (https://taxr.ai) and it was seriously a game-changer for my situation! I uploaded screenshots of my PayPal transactions and some notes about the original purchase prices of my items, and their system analyzed everything and told me exactly how to report it properly. It even identified which items could be classified as collectibles vs personal items and calculated my proper basis for each one.

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Aisha Rahman

•8M

It absolutely works with Friends & Family payments! The system looks at the entire transaction context, not just the forms. You can add your own documentation (texts, emails, etc) that proves the sale happened, and it helps establish the paper trail needed. For accuracy, I found it extremely reliable. The system uses actual tax code references and explains the differences between gifts, personal property sales, and business income. It clearly showed me when F&F payments need to be reported vs when they don't based on context, not just payment method. My CPA even verified its recommendations were spot-on.

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Yuki Sato

•8M

Okay I'm back to say I tried taxr.ai after my previous question and WOW what a difference! I uploaded screenshots of my PayPal transactions for some art I sold (also used F&F) plus some pics of the original receipts. The system immediately identified that I had a mixed situation - some qualified as collectibles with the 28% cap rate and others were actually personal items that had depreciated. It saved me from overpaying by literally hundreds of dollars! They explained everything with actual tax code references that made sense even to me. Would definitely recommend for anyone dealing with PayPal sales that didn't generate official tax forms.

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Carmen Flores

•8M

If you're still stressing over this and want to talk to an actual IRS agent (which might be the best option for peace of mind), try Claimyr (https://claimyr.com). I was hitting my head against the wall trying to get through to the IRS about a similar situation with private sales income. Their phone system is an absolute nightmare - I wasted HOURS on hold multiple times. Then I found this service that gets you through the IRS phone tree and holds your place in line. They got me connected to an actual IRS agent in about 20 minutes when I'd previously waited for 2+ hours and still got disconnected. You can see how it works here: https://youtu.be/_kiP6q8DX5c

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Carmen Flores

•8M

It works by using their system to navigate the complex IRS phone menus and then holds your place in line. When they reach an agent, they call you and connect you directly. It's not bypassing anything - you're still going through the official IRS channels, they're just handling the waiting and navigation part. The reason it works is they have the technology to stay on hold for long periods and dial repeatedly during optimal times when call volume is lower. It's completely legitimate - they don't access any of your personal information or speak to the IRS on your behalf. They just get you connected to an actual agent.

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CyberSamurai

•8M

I need to eat my words from yesterday. I was super skeptical about Claimyr but I was desperate about my PayPal tax situation so I tried it this morning. Holy crap it ACTUALLY WORKS. I got connected to an IRS agent in 35 minutes after trying for WEEKS on my own. The agent walked me through exactly how to report my cash app and paypal sales that never generated 1099s. Turns out I was overthinking it - for collectibles sold at a profit, I just need to report on Schedule D and keep my own records of the transactions. This saved me so much stress!! If you're confused about this PayPal Friends & Family situation definitely talk to an actual IRS agent.

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Zoe Alexopoulos

•8M

Since you don't have the original receipts, you'll need to make a reasonable estimate of your basis and be prepared to explain how you arrived at that number if asked. You could research similar items from that time period to establish fair market value when you purchased them. For the actual reporting, you'll use Schedule D (Capital Gains and Losses) and Form 8949 (Sales and Other Dispositions of Capital Assets) to report the sale. Since these are collectibles held for more than a year, they'll be reported as long-term capital gains subject to the 28% collectibles rate.

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Giovanni Gallo

•5M

Just wanted to add something important that I learned the hard way - make sure you keep detailed records of ALL your transactions, not just the big ones. I had a similar situation with collectible sales through various apps (PayPal F&F, Venmo, cash, etc.) and during my audit last year, the IRS wanted to see documentation for everything. They were particularly interested in establishing a pattern of whether I was buying/selling as a hobby vs running a business. For your $8,100 sale, definitely report it as a capital gain like others mentioned, but also document any other card sales you might have done throughout the year - even small ones. The IRS looks at the bigger picture to determine if you're a casual collector or if this constitutes a business activity, which would change how the income is taxed. Bank statements, text messages, even photos of the cards can help establish your basis and the legitimacy of the transaction.

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