Sports Card Taxes: A 2026 Guide for Sellers and Collectors

The IRS has paid much closer attention to online card selling since 2022. Whether you're a casual seller flipping the occasional rookie or a full-time card flipper, you have tax obligations on your sales. Here's the 2026 picture.

Disclaimer: This is general information, not tax advice. Consult a tax professional for your specific situation.

The 1099-K threshold

The 1099-K is the form payment processors (eBay, PayPal, Venmo, Whatnot, etc.) issue to sellers and the IRS reporting your annual transactions.

The threshold has shifted significantly:

• Pre-2022: $20,000 AND 200 transactions.
• 2022-2024: Phased-in lower thresholds.
• 2026 (current): Watch for current IRS thresholds — generally significantly lower than $20K.

The threshold change means many casual sellers now receive 1099-Ks they didn't before.

Receiving a 1099-K doesn't necessarily mean you owe tax

Important distinction: the 1099-K reports gross sales, not profit. Your tax liability depends on:

• Cost basis — what you paid for the cards.
• Selling expenses — fees, shipping, supplies.
• Holding period — long-term vs short-term capital gains.
• Hobby vs business classification.

A $5,000 1099-K doesn't mean you owe tax on $5,000. It means you must report the sales and calculate your actual gain/loss.

Cost basis tracking

For every card you sell, you need to know what you paid:

• Purchase price of the card.
• Grading fees if you graded the card.
• Shipping costs when you bought.
• Other associated costs.

This becomes your cost basis that's subtracted from sale price to calculate gain.

Holding period matters

For tax purposes:

• Held under 1 year → short-term capital gain (taxed as ordinary income).
• Held 1+ year → long-term capital gain (typically lower rate, 0%, 15%, or 20% depending on income bracket).

This matters: a $1,000 gain on a card held 8 months might be taxed at 22-32%. The same gain held 14 months might be taxed at 15%.

Hobby vs business classification

The IRS distinguishes between:

Hobby

• Not run for profit as primary purpose.
• Income reported but expense deductions limited.
• Losses cannot offset other income.

Business

• Run for profit as primary purpose.
• Full expense deductions including home office, equipment, mileage.
• Losses can offset other income (with limitations).
• Subject to self-employment tax on net earnings.

Most casual collectors are hobby sellers. High-volume flippers running their card sales as a business have different filing requirements.

Common deductible expenses (business sellers)

If you operate as a business:

• Cost basis of cards sold.
• Marketplace fees (eBay, Whatnot, COMC).
• Shipping costs (outbound to buyers).
• Packaging supplies (sleeves, toploaders, mailers).
• Grading fees.
• Storage costs (boxes, binders, climate control).
• Mileage to card shows and shops.
• Show admission fees.
• Software/tools for inventory and pricing.

Wash sale rules

Unlike stock, cards don't currently have wash sale rules per the IRS. You can sell a card at a loss and re-buy a similar card without the wash sale restriction. (This may change — consult a tax professional.)

Record keeping essentials

For tax purposes, maintain:

• Purchase receipts for every card with cost over $50.
• Sale records from each marketplace.
• Mileage logs for show attendance (business sellers).
• Inventory snapshots at year-end.
• Grading submission records.

Many sellers use spreadsheets, accounting software, or specialized card collection management tools.

State tax considerations

Beyond federal:

• State sales tax — some states require you to collect sales tax on card sales.
• State income tax — applies to your gain in most states.
• Marketplace facilitator laws — many marketplaces (eBay, Whatnot) collect sales tax automatically on your behalf.

Check your state's specific rules.

International tax considerations

For international sales:

• VAT/GST in destination countries — typically buyer's responsibility.
• Customs declarations required on shipments.
• Currency conversion for tax reporting purposes.

How to handle a 1099-K

If you receive a 1099-K:

1. Don't ignore it — the IRS has a copy.
2. Calculate your actual gain/loss for each transaction.
3. Report on Schedule D (capital gains) or Schedule C (business income).
4. Keep documentation for cost basis on every sale.
5. Consult a tax professional if your situation is complex.

How AI pre-grading helps with tax tracking

Pre-grading and inventory tools help you maintain records:

• Predicted grades support cost basis decisions.
• Comp data helps with year-end inventory valuation.
• Card identification ensures consistent records.

CardSense AI supports inventory management alongside grade prediction.

The bottom line

Sports card sales have tax obligations that have become more visible since 2022 1099-K changes. Track cost basis on every card, understand your hobby vs business classification, hold cards 1+ year for long-term capital gains rates when possible, and consult a tax professional for complex situations. Tax compliance protects you long-term.