Reporting 1099-K Losses vs Gains on collectible sales without documentation - Need advice!

This is helpful, but I'm wondering how detailed the documentation needs to be? Like would I need to list every single card I sold or could I just estimate the collection as a whole? Also, if I do have to pay taxes on some profit, how do I figure out what rate applies to me?

You don't need to list every single card individually - you can group similar items together. For example, you might categorize by card sets or by value ranges (commons, uncommons, rares, etc.). The key is having a reasonable methodology that you can explain if questioned. For tax rates, collectibles held over a year are subject to a maximum 28% capital gains rate, but the actual rate depends on your total income. If your regular income tax rate is lower than 28%, you'd pay your regular rate. If you held any cards for less than a year before selling, those would be taxed as ordinary income at your regular tax rate.

How exactly does it calculate the basis? Like does it just make up numbers or does it actually have pricing data for specific cards? My 1099-K is for a mix of items, not just cards.

Sounds sketchy tbh. Did you actually get audited? I'm hesitant to use a tool that's basically creating documentation after the fact when you admit you didn't have records. No offense but that sounds like asking for trouble.

It doesn't make up numbers - it uses historical pricing databases for collectibles and can handle mixed collections. You input details about what you sold (card sets, conditions, approximate purchase dates) and it pulls data from pricing archives to establish reasonable basis values. It works for various collectibles and personal items. I wasn't audited, but that's the point - it creates legitimate documentation based on real historical data, not made-up numbers. It's similar to what tax professionals would do if you lost receipts for any asset - establish a reasonable basis using available information. Nothing sketchy about using proper methods to document your actual tax situation versus overpaying.

How does that even work? The IRS phone system is notoriously terrible. Are they just auto-dialing for you or something?

I still don't get how this could possibly work. The IRS phone lines are backed up for everyone. How could some random service possibly get you through faster? Sounds like they're just charging you for something you could do yourself.

They use a callback system that basically holds your place in line without you having to stay on the phone. When they detect you're near the front of the queue, they call you and connect you with the IRS agent. It's not just auto-dialing - they have some tech that works with the IRS phone system to maintain your place in line. No, they don't just charge for something you could do yourself. The alternative is literally spending hours or days trying to get through, getting disconnected, and starting over. I tried calling myself for four days straight and never got through. With Claimyr, I was talking to an actual IRS agent in 15 minutes. The time saved was absolutely worth it.

That's a really good suggestion. I actually started down this path before posting here, but it was super time consuming trying to document hundreds of individual cards. I had a lot of older cards from the 90s that aren't well tracked on some sites. Do you know if there's any shortcut for documenting large collections or if I'd literally need to go card by card? Also, would printouts of current values be sufficient or does the IRS expect more official documentation?

You definitely don't need to document every single card individually. You can group them by sets and rarities - like "50 common cards from Tempest" or "25 uncommon cards from Ice Age" and use average values for those groups. For your valuable rares and mythics, you might want to document those individually. Printouts from reputable sites like TCGPlayer, MTGStocks, or even completed eBay sales would work as reasonable documentation. The IRS just wants to see that you made a good faith effort to establish fair market value. They understand that keeping receipts for collectibles over many years isn't always practical.

That's mostly correct, but the problem is the 1099-K makes it look like income to the IRS. If you don't report it at all, they'll send you a letter asking why the amount on your 1099-K isn't on your return. Better to report it on Schedule D showing zero gain or a loss (even though personal losses aren't deductible) than to ignore it completely.

This is really reassuring to hear from someone who went through the same process! The "replacement cost method" sounds like a smart approach - I never thought about using PSA population reports as documentation. Did your tax preparer give you any specific guidance on how detailed the spreadsheet needed to be? I'm wondering if I should break things down by individual sets or if broader categories would be sufficient. Also, when you say "reasonable effort," do you have a sense of what that actually means in practice? Like is there a minimum amount of documentation the IRS would expect to see? I'm definitely feeling less stressed about this after reading everyone's responses. It's good to know I'm not the only one dealing with this 1099-K situation!