Sports card taxes in 2026: 1099-K rules and a year-end checklist for eBay sellers
This guide explains when eBay sends a 1099-K for 2026, why the gross amount on the form is not your taxable gain, and how to subtract selling costs and cost basis to find your gain. It ends with a year-end records checklist.
For 2026, the standard federal threshold for a 1099-K is more than $20,000 and more than 200 transactions. eBay also sends one if backup withholding applied, and some states require one at lower amounts, such as $600 in Massachusetts. The form shows gross payments. Tax applies to your gain, which is sale proceeds minus selling costs minus cost basis, so the records that prove what you paid matter more than the form.
Sports card taxes come up every fall for eBay sellers, usually as two questions. Will eBay send me a 1099-K? What do I owe? The first question is about a form. The second is about profit, and you can only answer it if you know what you paid for every card you sold.
This guide covers the 2026 federal 1099-K rules, how to calculate your gain, how collectors, investors, and business sellers are taxed differently, and a year-end checklist you can mostly finish before December 31, while receipts are still easy to find.
Quick answer
- For 2026, the standard federal threshold is more than $20,000 in gross payments and more than 200 transactions in the calendar year. Both must be true, according to the IRS Form 1099-K instructions. You can still get a form below those amounts. eBay sends one if backup withholding applied to your payments, and the IRS says a platform may send one with lower amounts.
- Some states require a form at lower amounts. Massachusetts requires one at $600 or more, regardless of the number of transactions. Illinois requires platforms to file one when you have four or more transactions totaling more than $1,000, and Vermont's threshold is $2,000. eBay's 1099-K page for tax year 2025 also lists Maryland and Virginia among states with lower thresholds. Check your state's revenue department.
- No form does not mean no tax. The IRS says that even without a Form 1099-K, you must report payments you received for goods or property.
- Tax applies to your gain, not your gross sales. The 1099-K shows gross payments before fees, refunds, and shipping. Subtracting your selling costs and cost basis gets you to the real number.
- Without a record of what you paid for a card, you can't prove the cost that reduces your gain.
What changed with the 1099-K threshold
The American Rescue Plan Act of 2021 would have lowered the federal threshold to $600. The IRS delayed that change and set interim thresholds of $5,000 for 2024 and $2,500 for 2025 in Notice 2024-85. The One Big Beautiful Bill Act, signed July 4, 2025, then retroactively reinstated the threshold that applied before 2021. Some IRS pages now call that law the Working Families Tax Cuts. The standard federal threshold is again more than $20,000 and more than 200 transactions.
For calendar year 2026, with forms due in early 2027, the threshold works like this:
| Your 2026 eBay activity | Meets the federal threshold? |
|---|---|
| $30,000 across 150 sales | No, 200 or fewer transactions |
| $15,000 across 300 sales | No, $20,000 or less |
| $25,000 across 250 sales | Yes |
| $800 across 10 sales, living in Massachusetts | No, but a Massachusetts form is likely |
Two details matter:
- Each platform counts separately. The IRS notes that if you get paid on more than one platform, you could get more than one Form 1099-K.
- Box 1a is gross. The IRS instructions define it as the total "without regard to any adjustments for credits, cash equivalents, discount amounts, fees, refunded amounts, shipping amounts, or any other amounts." That is why the number on the form is almost always bigger than your gain.
How to calculate your gain
Calculate this for each card you sold:
Gain = sale proceeds - selling costs - cost basis
- Sale proceeds are what the buyer paid you for the card, including any shipping they paid.
- Selling costs are marketplace fees, promoted listing fees, and the shipping labels you bought.
- Cost basis is what you paid to acquire the card, plus costs such as sales tax and freight, per IRS Publication 551. The IRS doesn't mention grading fees. Ask your tax pro whether to add them, and the shipping to and from the grader, to the card's basis.
Here is one graded card sold on eBay, with grading added to basis. The numbers are illustrative.
| Line | Amount |
|---|---|
| Sale price | $180.00 |
| eBay fees | -$26.28 |
| Shipping label | -$5.00 |
| Price paid for the raw card | -$40.00 |
| Grading fee | -$25.00 |
| This card's share of shipping to the grader | -$5.00 |
| Gain | $78.72 |
The fee line assumes no store subscription, free shipping, no promoted listing, and 8.5% buyer sales tax. eBay charges its 13.25% final value fee on the $195.30 total, which includes the tax, plus a $0.40 order fee.
On the 1099-K, this sale counts at its gross amount, before fees. Your gain is $78.72. Lose the receipts for the $40 card and the $25 grading fee, and you can't prove the difference.
To run this math for your own cards, use the sports card profit calculator. The seller fee cheat sheet breaks down what eBay charges.
Allocate basis for boxes, breaks, and lots
If you paid $300 for a box and pulled 20 cards, each card's basis is a share of that $300, not zero. Publication 551 says to allocate a lump-sum price among the items you receive, and Treasury Regulation 1.61-6 says to apportion the cost "equitably" among the parts. Splitting a box by each card's estimated value is one way to do that. Ask your tax pro which method fits, write down the values you used, and apply the method to every box. The true cost of collecting guide has worked examples.
Sold at a loss?
If you sold cards you collected for personal enjoyment for less than you paid, you can't deduct the loss, but you don't owe tax on those proceeds either. The IRS page What to do with Form 1099-K gives two ways to report it. You can enter the payments for those cards at the top of Schedule 1, or report them on Form 8949 with code "L", which carries to Schedule D. If you also sold cards at a gain, the IRS says to report losses and gains separately. Either way, you need the original purchase price to show the loss.
Collector, investor, or business seller?
There is no single test. IRS rules weigh the facts of your activity, including whether you run it like a business, the time and effort you put in, whether you depend on the income, your history of profits and losses, and whether you expect to make a profit.
| Collector | Investor | Business seller | |
|---|---|---|---|
| Where sales usually go | Form 8949 and Schedule D | Form 8949 and Schedule D | Schedule C |
| Gains on cards held over a year | Long-term rates, up to 28% if treated as collectibles | Long-term rates, up to 28% if treated as collectibles | Ordinary income rates |
| Losses | Not deductible | Capital losses, with limits | Deductible business losses |
| Other expenses | Not deductible | Mostly not deductible, though investment interest can be, with limits | Ordinary and necessary expenses, such as supplies, fees, software, and mileage |
| Self-employment tax | No | No | Yes, if net earnings are $400 or more |
The self-employment tax rate is 15.3%. It applies to 92.35% of your net earnings from self-employment, according to IRS Topic 554.
Buying and selling regularly without a profit motive can make the activity a hobby instead. You report hobby income on Schedule 1, and hobby expenses are not deductible. The cost of the cards you sold still counts, because Treasury Regulation 1.183-1(e) lets you subtract the cost of goods sold from hobby receipts.
The 28% rule in section 1(h)(5) uses the definition of a collectible from section 408(m), which lists art, rugs, antiques, metals, gems, stamps, coins, alcoholic beverages, and other property the Treasury specifies. It doesn't name trading cards. Ask your tax pro whether the collectibles rate applies to yours. Also, 28% is a maximum rate. If your ordinary bracket is lower, the lower rate applies. Cards held a year or less are short-term and taxed at ordinary rates.
If you file as a business, your records are what support that treatment. IRS regulations list keeping complete and accurate books and records as one sign that an activity is run for profit.
Year-end records checklist
Do items 1 through 8 before December 31. Order confirmations and show receipts are easier to find now than in April. Items 9 and 10 wait for January, when the 1099-K arrives.
- Pull every 2026 sale into one list. Include eBay sales and off-platform sales at card shows, on Facebook Marketplace, COMC, or Whatnot, and cash deals.
- Match each sold card to what you paid. Search your email for order confirmations, check PayPal and bank statements, and photograph handwritten show receipts.
- Allocate basis for boxes, breaks, and lots. Write down the method you used.
- Attach grading costs to the right cards, including submission fees, upcharges, and shipping each way.
- Log the selling costs for each sale, including fees, promoted listing charges, labels, refunds, and returns.
- Keep business expenses apart from card costs. Supplies, top loaders, software subscriptions, show tables, and mileage go in one place. Count each cost once, in a card's basis or as an expense, never both.
- Note the purchase date of any card you've held more than a year, if you're a collector or investor.
- Check your state's 1099-K rule so a form in January isn't a surprise.
- In January, compare the 1099-K to your records. The gross on the form should roughly match the gross sales in your records.
- Export one file for your tax pro, with one row per sale showing the date, card, proceeds, fees, shipping, cost basis, and gain.
How CardZen helps with the records
CardZen doesn't file taxes, produce an income tax report, or decide whether you're a business. It keeps the per-card numbers a tax pro asks for.
- Cost basis for each card. Import a cost file reads an Excel workbook or CSV of what you paid. It links rows to cards by cert number or your own eBay item number, and suggests matches on player, year, set, and card number for you to confirm. Unsold cards with no purchase recorded show up on the Loose ends page.
- eBay sales with fees and net. The Sales page syncs your eBay sales with the fees and shipping labels eBay reports. It shows cost basis and net profit for each sale once the fees and the card's cost are recorded, and flags sales with no recorded cost. You can add off-platform sales by hand. Export CSV downloads the ledger with one row per sale, leaving cost basis and net blank where they are still unknown.
- Business expenses kept apart. Business expenses records supplies, grading, and other costs that aren't already part of a card's cost. Keep each cost in one place, so you count it once.
- A view of the year. The Cash flow report shows money in and money out for a period such as Year to date. Its Profit section shows realized card profit and profit after business expenses, counting only the cost of cards sold in that period.
If you track all of this in a spreadsheet now, you can import that file and map its columns. Here's how a spreadsheet compares to an inventory app.
Start free with CardZen. The free trial is 15 CardSense scans or 14 days, whichever comes first, with no credit card required.
Last reviewed October 19, 2026. Thresholds and state rules change, so check current IRS and state guidance before you file.