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M
mbmart67
August 31, 2022
Question

Hobby/collectibles

  • August 31, 2022
  • 1 reply
  • 0 views

My wife and I collect LEGO as a hobby -- not as an investment or for the purpose of collectibles as defined in the IRS code.

 

In order to pare down our collection, we will be selling some of those sets over the next several months.  This is not something I have done in the past and is not for the purpose of earning a profit, although there may indeed be some profit realized based on the original purchase prices vs the selling price -- won't know that until the sales are actually made.

 

Given the IRS's new requirements related to PayPal transactions, how might this affect our tax filing for 2022?

    1 reply

    B
    Bsch4477
    August 31, 2022

    Report as hobby or other income. It will be taxed at your regular income tax marginal rate. You can’t deduct expenses. 

    M
    mbmart67Author
    August 31, 2022

    Do I deduct my original purchase price and show only the profit or loss on each item?

    B
    Bsch4477
    August 31, 2022

    Show only the income. As I noted you can’t take any deductions from that income. 

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