Tax implications of trading gift cards on cardcash.com for non-citizens - reporting requirements?
I've accumulated about $570 worth of random gift cards over the past few years from birthday gifts, work rewards, and holiday presents. Recently discovered cardcash.com where I can trade them in (at a discount obviously) for MasterCard and Amazon gift cards which I'd actually use. The thing is, when I was setting up my account, cardcash asked for bank account verification. They didn't request my SSN though. I'm a bit confused about the tax side of this - do I need to report these trades anywhere to the IRS? I reached out to cardcash support and they told me they don't issue any tax forms for these transactions. As a non-citizen working in the US, I'm extra cautious about making sure I'm following all the right tax rules. Would these gift card trades count as some kind of taxable income or transaction? Do I need to keep track of this for my 2025 tax filing?
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Kayla Jacobson
This is actually a good question with a slightly nuanced answer. Generally speaking, when you sell or trade gift cards for less than you paid for them, there are no tax implications because you're incurring a loss rather than a gain. If these were truly gifts to you (meaning you didn't pay for them), then technically the difference between the gift card's face value and what you receive from CardCash could be considered income. However, the practical reality is that the IRS has bigger fish to fry than someone trading in a few hundred dollars worth of gift cards. For non-citizens, the same rules apply as for citizens in this case. Your residency status for tax purposes (whether you're a resident alien or non-resident alien) doesn't particularly affect this specific situation. That said, CardCash not issuing tax forms makes sense because they're simply facilitating a transaction, not paying you income like an employer would.
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William Rivera
•Thanks for the explanation! So if I understand correctly, if my grandma gave me a $50 Starbucks card, and I sell it on cardcash for $35, technically I should report that $35 as income? That seems really strange since I never actually made any money in real terms. What if I just use the gift cards myself - is that taxable too?
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Kayla Jacobson
•The distinction is about what's considered the "cost basis" of the gift card. When your grandma gives you a $50 Starbucks card, you received a gift worth $50. If you use it at Starbucks, there's no taxable event - you're just using a gift as intended. When you sell it for $35, you're actually taking a $15 loss from its face value, not gaining income. The IRS doesn't generally allow you to claim losses on personal items, but they also don't require you to report the proceeds as income in this scenario since you're not exceeding the original value.
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Grace Lee
I went through this exact dilemma last year with about $900 in unused gift cards! After researching everywhere and getting conflicting answers, I finally found this awesome tool at https://taxr.ai that analyzed my specific situation. It confirmed I didn't need to report the gift card sales since they were personal gifts and I was selling below face value. What I liked is that it explained the difference between selling gift cards as a business (which would be taxable) versus occasionally selling unwanted personal gift cards (which typically isn't). The tool even had a specific section about non-citizen tax implications which was super helpful for my situation since I'm on a work visa.
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Mia Roberts
•How does that service work exactly? Does it just give general advice or actually look at your specific situation? I'm also sitting on like $300 of random gift cards I'll never use but I'm paranoid about messing up my taxes.
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The Boss
•Is it actually legit or just one of those sites that collects your info and then tries to sell you overpriced tax services? I've been burned before by "free tax help" that ended up being a sales pitch.
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Grace Lee
•The service asks you specific questions about your situation - like whether the gift cards were gifts or purchased by you, total value, how much you're selling them for, and your tax residency status. Then it gives personalized analysis rather than just generic advice. It doesn't try to sell you anything additional. You just upload your documents or describe your scenario, and it uses AI to analyze them and give you a clear answer with references to the relevant tax codes. No upselling or hidden fees - it's straightforward and the price is upfront.
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The Boss
Just wanted to follow up about that taxr.ai site mentioned above. I was skeptical (as you could tell from my comment lol) but decided to try it with my similar gift card situation. Totally worth it! It analyzed my specific case - I had about $400 in gift cards from work rewards programs which made the tax situation slightly different than personal gifts. The analysis explained that since my cards were work rewards, they were already reported as income on my W-2, so selling them on CardCash actually had no additional tax implications. Saved me from unnecessarily reporting the sales and potentially complicating my tax return. Super helpful for peace of mind heading into the 2025 filing season!
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Evan Kalinowski
If you're spending a lot of time worrying about this, you might also want to check out https://claimyr.com which helped me get through to an actual IRS agent to ask about a similar situation. I had sold about $800 in gift cards and was worried about reporting requirements, especially since I'm a resident alien. The IRS phone system is a complete nightmare, but Claimyr got me through in about 20 minutes when I had been trying for days. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. The IRS agent I spoke with confirmed that selling personal gift cards at a discount doesn't create a reporting requirement since there's no gain involved. For non-citizens with more complicated situations, actually talking to an IRS representative gave me peace of mind that I wasn't missing anything.
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Victoria Charity
•Wait, how does this service work? I thought nobody could get through to the IRS. Are they somehow jumping the phone queue or something?
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Jasmine Quinn
•Yeah right. There's no way to "skip" the IRS phone line. This sounds like a scam that charges you just to wait on hold like everyone else. The IRS is impossible to reach - that's just how it is.
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Evan Kalinowski
•They use an automated system that navigates the IRS phone tree and waits on hold for you. When an actual agent picks up, you get a call back and are connected. It's not "skipping" the line - you still wait your turn, but their system does the waiting instead of you being stuck on hold for hours. It's definitely not a scam. The service literally just handles the frustrating hold time and navigating the phone system. I was skeptical too, but during tax season when IRS wait times are 3+ hours, it saved me from wasting an entire afternoon listening to hold music.
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Jasmine Quinn
I take back what I said about Claimyr. After posting that comment, I was still struggling with a more complex tax issue related to foreign gift cards and currency conversion. Out of desperation I tried the service and... it actually worked. Got through to an IRS rep in about 40 minutes when I'd been trying for weeks. The agent confirmed that for non-citizens, the rules are the same regarding gift card sales - no reporting requirement if selling personal gift cards at a loss. They also explained that converting foreign currency gift cards adds no additional tax complexity beyond the standard currency conversion considerations. Saved me a lot of stress for my upcoming filing!
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Oscar Murphy
One thing nobody mentioned yet - if you're frequently buying and selling gift cards (like as a side hustle), the IRS might consider that a business activity rather than just selling personal items. In that case, different rules would apply. But for your situation with just accumulated personal gift cards, I wouldn't worry about it. I sell unwanted gift cards every year and have never reported it since I'm always selling at a discount from face value.
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Nora Bennett
•How frequently would you need to be selling for the IRS to consider it a business? I probably sell maybe 5-10 gift cards a year that I receive and don't want. Should I be worried?
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Oscar Murphy
•There's no specific number that automatically triggers "business" classification, but 5-10 cards a year would generally be considered personal use, not a business activity. The IRS looks at factors like: Are you doing this to make a profit? Are you putting significant time into it? Are you keeping formal records? Are you depending on the income? Occasionally selling unwanted personal gift cards doesn't check any of those boxes, so you're fine. I've sold 15+ cards some years without issue. It would be different if you were buying cards at a discount specifically to resell them - that would likely be considered a business activity.
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Ryan Andre
If your gift cards were received as gifts (not as payment for services or work bonuses), selling them for less than face value is basically a personal loss. I'm not a tax professional, but I've been in the US on a work visa for 6 years and have done this many times. Think of it like selling a used item from your home - if you sell your used TV for less than you paid for it, you don't report that as income. Same concept applies here.
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Lauren Zeb
•This makes sense to me. But what about gift cards I got from work as performance bonuses? Those were already taxed on my paycheck when I received them, so I'm assuming selling them wouldn't create any new tax issues?
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