TAXES & INVESTING In COLLECTIBLES: Does the IRS View Collectibles as Investments? A Primer on Taxes!

**Controversial Video that may NOT be what you want to hear! **
Welcome to an exciting video on the subject on investing in antiques and collectibles and an understanding as to how the IRS defines and taxes collectibles at present time. This video also takes a look at strategies investors can use and talks about how silver and gold bullion are taxed as well as numismatic coins!
Email for Antique/Collectible Consulting Services: [e-mail]
Patreon: / reservedinvestments

[@TheGreatSince1993]

19:30 starts the best line I’ve heard in a long time

[@SpielmansCollectibles]

I really enjoy and appreciate these types of videos. I'm looking forward to the next ones in your tax series!

[@expex]

Another great, informative session. Looking forward to a more detailed tax implications on collectibles.

[@benhascom8338]

I’m not even in a country where this is related to me but i’ll Still around anyway.

[@startyde]

I'm in MA, so PayPal has been sending 1099s for anyone making over $600 for the last three years, so to the rest of my peeps, welcome to hell soon :)

[@splugereport]

Same in IL or maybe its 1k

[@ivanvargas2425]

Is this starting in 2022? Or is this now? I’m in Texas. $600 is nothing

[@startyde]

@@ivanvargas2425 There are federal taxes and state taxes. In 2022 all systems will report your profits to the feds (starting with your 2021 sales). States have their own individual laws, and MA passed this very $600 criteria in 2018, so they've already been reporting. When Shawn says you're taxed 28 percent that is only the federal rate. The States get their own piece, pushing taxation well above 30%. And because eBay / PayPal etc automatically send the 1099s to the state and feds, it's not like you can just ignore and hope you don't get an audit. A computer will simply determine if anyone who received a 1099 didn't submit their own in their taxes and flag you to be billed, possibly with penalties. TLDR: for everyone who hasn't been declaring every dollar of their income from any source is about to get a rude awakening as to how the US pays for things.

[@migueldias8546]

Thank you Shawn. This is a very informative video. I only want to add one piece of information. You have to understand that the IRS is very well aware of how much unequal our society is. So if you are a small guy, be very careful, the IRS will not miss you! The IRS makes much more money and way faster by going after the lowest income people than with the billionaires because they can pay for a lawyer and can stall the process for years if not decades. On top of that, the IRS needs lawyers too, meaning needs to spend money to eventually get some… This is why the little guys are always the best target for IRS: a simple letter is enough to scare them and they usually send the check in the next days!

[@ayrasimmons1607]

I'm one of those ladies, and thank you.

[@ReservedInvestments]

LOL, you are quite welcome.

[@Fostercards]

The statement “collectors should never sell” 100% agree with you Shawn! I’m really glad you touched on that subject. It is NOT addressed enough! Thank you 👍🏼

[@vgrepairs]

Absolutely WEALTHY in knowledge. These videos are incredible

[@Ontario100]

The new $600 threshold will be a game changer for a lot of people. Great information. Thanks! 👍

[@miguelh4750]

So people will switch to private sales, cash sales, untraceable sales ?

[@marcellachine5718]

@@miguelh4750 just wait till physical money is no longer valid. By not using physical cash, you are making it happen.

[@patrickellsworth5427]

I had to watch this one twice. Super important video. THANKS

[@ivanroliz4723]

This means 28% of my profit is going to the government. Wow, traditional assets have all of the best benefits.

[@startyde]

28 percent at the federal level. State wants a piece too. Ends up being about a third of every dime you make.

[@SpielmansCollectibles]

@@startyde Don't forget the self employment taxes too. Your profit disappears so fast

[@hausmeister3695]

Hello people of good taste and harsh thruths :) Shawn "the needle" is on tour again! Including the ladys there are sitting along their loved ones ;) my girlfriend and i are about 14 years together and she is no timmy anymore. Thanks for sharing your opinion and expertise. I personelly like the topic, although im living in germany and that dont apply to me but is always good to know some things that are mostly the same overall. Liebe Grüße

[@georgedorn9394]

Do you think over the next 2-3 years the amount of quality of stuff on ebay will decline as random people stop listing to not get over $600?

[@SuperBrown789]

Very informative. Thanks for all the great content and knowledge you share. Keep them coming

[@Casualgamingpoet]

Great vid as always. I've been working on downsizing my collection . I've been able to get the collection to pay for itself for almost two years straight. The dealer route is the way to go for so many collectors.

[@justhitaflik1364]

I have so much to learn still, thank you Shawn.

[@sngs9565]

Love your intake and always worth it to watch! Enjoy it always! You do sound like Cramer of CNBC Mad Money!...(meant in a very good way). Thank you very much for your videos!

[@Cookiedon15]

I kind of wondered; if you trade (barter) your house, vehicle, something that's otherwise taxed when sold, for an antique/collectable, how does the IRS determine the value to be taxed? Say you sold your Honda valued at $5k for a 9.0 graded copy of Ocarina of Time. Well, I'd imagine that they would tax you on the $5k. Sorry if my post sounds confusing.

[@image_comics9224]

Great video Shawn look forward to more videos related to this topic😉👍

[@KeyKiller74]

WTF is going on I use to buy comics & cards on ebay few years ago & never paid any taxes & just yesterday I decided to buy a card I always wanted & got hit with a $11.00 tax. I should have stayed retired from collectables market. =(

[@philipchiu9835]

California began charging sales tax on all eBay transactions around 2017. That was a real shock. Sucks. Govt wants everything. Bah

[@CoopsCollection]

Isn't BTC/crypto taxed at the normal long and short term capital gains? 20% max?

[@shaheedali651]

Comics and cards is my hobby since 1990. Its a hobby to trade and sell.

[@jebrennock]

As always, great content!

[@justhitaflik1364]

Can't wait for that dealer video.

[@michaelbertha4652]

Sean great topic and extremely informative thank you. I’m not sure if it is worth mentioning but what happens if one sells an alternate assets (antique/collectible) in a private sale and not through an auction house? I I gather it is on the honor system that the transaction will be reported through ones Schedule D 1040 Tax Return.

[@erics7757]

If you sell a collectible that you've held LONGER than a year, but it is more tax advantageous to use the ordinary income bracket (if you're in a lower tax bracket) than the 28% long term rate, you get to use the ordinary income rate.

[@collecticraze]

This is the one question that I have read conflicting information on. Why would you be penalized for holding a collectible longer than a year vs less than a year if you are in a lower tax bracket than the 28%? There’s really no precedent in any other asset class where you can worse off for taking advantage of a long term capital gains rate. I’ll have to go through the tax forms and take a closer look.

[@erics7757]

@@collecticraze www.irs.gov/publications/p550#en_US_2017_publink100010737 "If you are otherwise subject to a rate lower than 28%, the 28% rate does not apply."

[@JeanMathieuG]

Awaiting the stale donut slapping to appear in the follow-up video, please!

[@ReservedInvestments]

That may just happen! Lol! 😂

[@splugereport]

Ask and thou shall receive. Thanks :)

[@jakobh6257]

Great info, thanks 👍🏻

[@Stampede215]

Great video as always!!

[@sattoriemei3210]

Thank you for this video! Very informative and something to think about. I'm not sure if you've covered this in another video, but can/does the cost basis include sales tax and shipping costs when calculating tax gains/losses?

[@224dot0dot0dot10]

Thank you for asking this question because I too was wondering how you can factor the shipping costs into the cost bases when calculating taxes!

[@MetalBum]

Yes cost basis you add your costs. Sales tax shipping etc.

[@charless6602]

Shawn. Good pts all around. So perhaps one way to go around these taxes is to do private transactions. Can you talk about that more as I know that happens a lot in the collectibles market, especially the private art sale world. Thanks!!

[@miguelh4750]

I live In Canada. Any idea where I can find the info for my country for tax collectibles ?

[@ReservedInvestments]

A tax agent or accountant would know. You could easily call them. I don’t know Canadian tax laws, sorry…

[@Poke_Garage]

Great video! New subscriber here!

[@moodswing4460]

How does the IRS know what I sold and when I bought it? If I sell my old toys for profit, is that considered capital gains?

[@ChipHunter3]

The IRS is going to be a mess at the end of 2022. Most people probably won't be prepared to calculate costs basis after selling some stuff on ebay and will end up paying taxes on their entire payout. I also think most people will claim any earnings on collectables as other ordinary income (if it is beneficial for them) as there is simply no way the IRS would be able to verify what was sold and for how long it was held, at least in the short term. In the long term perhaps some automated software will be able to audit everyone...

[@charizard_baller69]

Hey Sean, was the video about every collector being a dealer ever released?

[@ReservedInvestments]

Every collector is not a dealer, so I don’t know what you are referring to…

[@charizard_baller69]

​@@ReservedInvestments around the 21 minute mark you said every collector and investor should be a dealer and that you would release a video with more information on that. I was just wondering if that video ever came out?. I misspoke the first time. My apologies

[@ReservedInvestments]

Ah, yes. That video has not been finished yet. Thank you.

[@TheGreatSince1993]

I like Pokémon cards. Great video!

[@patrickellsworth5427]

How can the IRS determine how much capital gains tax to assess if they don't know what you bought your collectible for?

[@ReservedInvestments]

If you were stupid enough not to keep detailed records, guess what, they can assess the tax on the full amount. hence why accurate record keeping is important.

[@leehaskins307]

i’m a sole proprietor so i write off many costs such as travel, grading, shipping, material, etc… lots of stuff to write off gains as expenses.. normal business in america… make gains, offset by expenses….

[@ReservedInvestments]

Hence why I state collectors should be dealers...;)

[@leehaskins307]

@@joshn2342323 Yes, its worthy. And of course if there are profits the costs are an offset to those profits. Just like any business in America. There is a schedule in the tax forms just for that to record profits and expenses for sole proprietors…. For me its a hobby I love and at the same time considered a business by tax code becuase I do make profits and I do have expenses to write the off… Pretty standard stuff… if u need more info look into being a sole proprietor… thanx for the comment...

[@lovesgibson]

I guess this is the reason for the widespread use of Pokémon/KZbin person to person private sales on Instagram lmao. And using crypto for to pay

[@ivanvargas2425]

Wow $600 is nothing. I guess I’ll stop eBay now.

[@ReservedInvestments]

That doesn't go into effect until the end of 2021.

[@ivanvargas2425]

@@joshn2342323 only bad part is you’ll get half the asking price at least at my Texas city

[@defaultgenCQ]

Shawn, do you know if you get hit with double taxes with these fractional share companies? Otis says they got a $220k offer for a Super Mario Bros and they say that comes to 154k after corporate taxes. People bought in at $77k, so they "doubled their money". Do people then *also* pay capital gains on their shares? These fractional share investing companies seem like literally the worst possible way to invest in anything if you get hit with a 28% tax twice!! I could be wrong though, I'm not exactly sure how they work.

[@ReservedInvestments]

It wouldn’t be double taxation, but they would pay taxes on any gains.

[@drewwhelan6695]

It’s a MAXIUM 28%, most of the time it’s never there

[@nicholashodson7387]

Hello again Shawn, love your videos! I followed your advice and purchased the coin collectors survival guide and have started chipping away at it. As I mentioned before I am working on an economics project and I think I’m going to narrow my field down to the beanie baby bubble. I was wondering where I could find price histories for highest prices paid. I understand private sales are unlikely to be recorded, but if there were any auction houses or notable sales that made the news, I’m wondering where I might be able to look. Mostly what I find are manipulative websites trying to artificially push up the prices of beanie babies.

[@ReservedInvestments]

Get a copy of the book ‘The Great Beanie Baby Bubble.’ Some of your answers are there….😉

[@nicholashodson7387]

@@ReservedInvestments awesome thank you i just came across. I also recommended You to a family member for hire for consultation services, he has millions (literally) of sports cards and figurines. I forwarded him your linked in account i found online, I hope that’s ok.

[@ReservedInvestments]

@@nicholashodson7387 Of course it is okay. Thank you!

[@philipchiu9835]

Awesome video thanks. I just started investing in old sealed magic and pokemon cards so after paying original sales tax plus selling fees on eBay etc, does this count as expenses that can be deducted as costs of good sold after I sell the items in the future? Sucks paying taxes on both ends of collecting transactions considering we investors take all the risks too.

[@ReservedInvestments]

Your total cost is your buy in price.

[@unstoppableExodia]

That change from 20k to 600 at which that tax form is sent, won’t it just drive people to do more sales privately where Uncle Sam can’t see the profits they might be making? I’m not in USA so that change won’t affect me directly buuut it’s very likely a similar thing could happen where I live as it’s also a capitalist democracy designed to benefit the rich. It’s bad enough being taxed by eBay and PayPal for using their platforms but at least they’re useful and have some benefits including buyer protection. Having to pay taxes on top of those fees would be horrible for resellers who want to maximize profits

[@palletown_marketplace]

It would but good luck running a successful long term business by doing only in person cash deals

[@unstoppableExodia]

@@palletown_marketplace yeah it would be very limiting for anyone who operates as a dealer

[@ivanvargas2425]

Not enough buyers in your local city for the asking price

[@palletown_marketplace]

@@joshn2342323 if you are buying and selling and making profit you are required to report sales tax. It’s the law. And that’s why they are not cracking down on this.

[@johnnyfuture3524]

Is this the Shower-Fresh Shawn I am watching?

[@ReservedInvestments]

Lol!

[@robertbarry1792]

As a retired musician, If I buy musical instruments and accesories and sell them years later are the considered collectables or as a hobby from a tax point of vuew? Do long term losses count?

[@ReservedInvestments]

You would be responsible for taxes on any gains. You can deduct expenses and losses. My suggestion would be to speak to a tax accountant who can help guide you and offer up some tips.

[@Topstone1]

Hey! When ebay sends me my 1099-K for my $10K Gross sales on my collectibles, how do I account for the *profit* portion ($500) of that and the write-off (cost basis, RETURNS, etc.) portion? Thanks!

[@fuzzywuzzy3841]

I just want to ride the trends make my money and move onto the next HUSTLE. Speculating long term is RISKY. Unless your YOLOing TESLA CALLs, Then you'll never lose JK hahah

[@Foslopac]

FBI and CIA. Someone's been watching Kevin Samuels. lol

[@ReservedInvestments]

Lol!

[@agui1234100]

Really wish you weren’t condescending in your video. People have a windfall on a collectible. Explain the tax implications vs trying to tell people how they should spend/invest their money

[@ReservedInvestments]

And I guarantee that if I said that you should INVEST in Pokemon, you would have no problem with the video. Hard to take someone serious with 'Pokemon Collection' noted right in their name...