Trading cards (sports, Pokémon, Magic) are taxed as collectibles — up to 28% federal on long-term gains. Your cost basis includes grading fees, buyer's premiums, and your share of box break costs. If you got a 1099-K from eBay, that's gross sales — not your taxable profit.
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Sold a PSA 10 Charizard? Flipped a rookie card? The IRS considers trading cards — Pokémon, sports, Magic: The Gathering — to be collectibles, subject to a maximum 28% federal tax rate on long-term gains. Here’s everything you need to know.
Are trading cards “collectibles” under the IRS definition?
Trading cards aren’t explicitly named in IRC §408(m)(2), which lists art, rugs, antiques, metals, gems, stamps, coins, and alcoholic beverages. However, the statute also includes a catch-all for “other tangible personal property that the Secretary determines to be a collectible.”
In practice, most tax professionals treat trading cards as collectibles, and the IRS has not carved out an exception. If you’re selling valuable cards at a profit, report them as collectibles — it’s the conservative and defensible position.
Treat all trading card gains as collectibles: up to 28% federal for long-term, up to 37% ordinary income for short-term (held one year or less).
Short-term vs. long-term: the one-year rule
The 28% cap only applies if you held the card for more than one year before selling. Flip a card within 12 months of purchase and the gain is taxed as ordinary income at your marginal rate — which can reach 37%.
This makes the holding period critical for high-value cards. A $50,000 gain on a card held 13 months is taxed at a maximum of 28%; the same gain on a card held 11 months could cost you up to $18,500 in federal tax alone.
Cost basis: what actually counts
Your taxable gain is the sale price minus your cost basis. Most sellers undercount their basis — especially on graded cards. See our full cost basis guide for everything that counts.
- Purchase price (including eBay purchase price, auction hammer price, or retail price)
- Buyer’s premium at auction houses (Heritage, PWCC, Goldin — typically 15–20%)
- Sales tax paid at time of purchase
- Shipping and insurance to receive the card
- Grading and authentication fees (PSA, BGS, SGC, CGC — all includable)
- Shipping to and from the grading company
Purchase a Base Set Charizard BGS 10, then send it to PSA for reholder.
| Cost Item | Amount |
|---|---|
| Purchase price (eBay) | $8,000 |
| Sales tax (state) | $660 |
| Shipping + insurance in | $28 |
| PSA grading fee | $150 |
| Shipping to/from PSA | $42 |
| Actual cost basis | $8,880 |
Sells for $12,500 → taxable gain is $3,620, not $4,500. At 28%, that’s $246 saved.
Box breaks and pack purchases: the tricky allocation
When you buy a box or a break spot, your cost basis is what you paid — not the retail value of individual cards you pull.
If you spend $500 on a hobby box and pull three cards worth $2,000, $800, and $50, you need to allocate the $500 cost basis across all three cards by relative fair market value at the time of pulling. Selling the $2,000 card immediately means your basis in that card is approximately:
$500 × ($2,000 ÷ $2,850) ≈ $351
Your gain on that card is $2,000 − $351 = $1,649. The math is imprecise, but document your reasoning — valuation services like Beckett can help you establish defensible market values for the allocation. The alternative — reporting a $0 basis — is worse.
Same principle: allocate your total spend across all items pulled by relative value. Keep a spreadsheet — especially if you’re doing this at scale.
Selling on eBay, TCGPlayer, and COMC
Platform selling fees (eBay final value fees, COMC commissions, TCGPlayer fees) reduce your net proceeds, which reduces your taxable gain. They do not add to your cost basis — instead, subtract them from the sale price when calculating gain. For a detailed comparison of fees and tax treatment across platforms, see our eBay, StockX & Whatnot guide.
For example: sell a card for $1,000 with $130 in eBay fees. Your net proceeds for tax purposes are $870, not $1,000.
The 1099-K from eBay, StockX, and Whatnot
If you sold more than $20,000 across 200+ transactions on a single platform in 2025 or 2026, you’ll receive a Form 1099-K. This is a reporting threshold — it does not mean you owe tax on the full reported amount.
The 1099-K reports gross sales, not your net gain. You still report based on your actual gains and losses on Schedule D. See our full 1099-K guide for collectors for exactly how to handle it.
State taxes on top
Most states tax capital gains as ordinary income. California adds 13.3%, New York adds up to 10.9%. If you’re in a high-tax state, your effective combined rate on long-term card gains can exceed 40%. See our state capital gains guide for all 50 states.
No-income-tax states (Florida, Texas, Nevada, Wyoming) owe nothing at the state level.
What if you sell at a loss?
Investment losses on trading cards can offset capital gains from other investments, plus up to $3,000 of ordinary income per year. Unused losses carry forward indefinitely. The key: you must have held the cards as investments, not personal use. Cards you bought purely for the hobby — not to resell — don’t generate deductible losses. Your IRS classification determines how losses are treated.
When you’re ready to file, our step-by-step reporting guide walks through Form 8949 and Schedule D for collectibles sales.
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