Yes, you must report all Pokémon card sales to the IRS, regardless of whether you receive a Form 1099-K or how much you sold. The IRS requires income reporting even for small sales, though the threshold for when you receive official documentation has been changing. If you sold a first edition Charizard for $2,500 on TCGplayer last year, you owe tax on any profit from that sale—and that obligation exists even if the platform didn’t send you a 1099-K form.
The amount you sold determines whether you’ll receive a Form 1099-K, which documents your gross sales to the IRS. But don’t make the mistake of thinking “no form means no reporting requirement.” The IRS expects you to report all trading card income on your tax return. The form is just a record-keeping tool that also alerts the IRS to monitor your return. Whether you get the form or not, you’re responsible for reporting.
Table of Contents
- When Does the IRS Send You a Form 1099-K for Card Sales?
- Pokémon Cards Are Classified as Collectibles—With Special Tax Rules
- Business Sales Versus Hobby Sales—A Critical Distinction
- Tracking Costs and Building Your Records for Tax Time
- The Most Common Mistake—Not Reporting Because You Didn’t Get a 1099-K
- Filing Deadlines and What to Do When You Receive a 1099-K
- How Changing Thresholds Affect Your Strategy Going Forward
- Conclusion
When Does the IRS Send You a Form 1099-K for Card Sales?
Form 1099-K thresholds have shifted significantly in recent years, and knowing your threshold is critical. In 2024, you received a 1099-K if your gross sales hit $5,000 or more on a platform like TCGplayer or eBay. That threshold dropped to $2,500 in 2025, and starting in 2026, it drops again to just $600 in gross sales. If you’ve been selling cards for any length of time, you may be subject to multiple threshold years, each requiring you to track and report appropriately. There’s also an alternative threshold to understand: if you have more than $20,000 in payments across 200 or more transactions on a platform within a single year (which applies starting in 2025-2026), you’ll receive a 1099-K even if you haven’t hit the gross dollar threshold. This is designed to catch high-volume sellers who might otherwise slip under the radar.
For casual pokémon collectors who list fifty cards at fifty dollars each, this alternative threshold rarely applies. But for grading shop owners or professional dealers listing hundreds of cards, this is the more relevant rule. One crucial point: the Form 1099-K reports your gross sales amount, not your profit. If you sold $4,000 worth of cards but spent $3,000 acquiring and grading them, the 1099-K still shows $4,000 to the IRS. You report your actual net gain or loss on Schedule D of your tax return. This distinction matters because the IRS sees the gross number first and may flag you if you underreport it. Your job is to reconcile the gross sales with your cost basis to show your real taxable gain.
Pokémon Cards Are Classified as Collectibles—With Special Tax Rules
The IRS doesn’t treat Pokémon cards like stocks or bonds. Instead, they’re classified as “collectibles” under Internal Revenue Code Section 408(m), the same category as rare coins, art, antiques, and sports memorabilia. This classification has real consequences for how you’re taxed on your profits. If you hold a Pokémon card for more than one year before selling it, the profit is taxed at a long-term capital gains rate—but with a critical difference from other long-term gains. Most long-term capital gains are taxed at 0%, 15%, or 20% depending on your income bracket. Collectibles, however, face a maximum federal rate of 28%, regardless of your income level.
That’s 8 percentage points higher than the top rate for other long-term investments. If you made $10,000 in profit on a high-graded card collection, you’d pay roughly $2,800 in federal tax (before state taxes), whereas the same $10,000 profit from stocks might only cost you $2,000. This difference adds up quickly for serious collectors. Short-term gains (holding the card for one year or less) are taxed as ordinary income at your marginal tax rate, which could be 37% or higher depending on your bracket. That makes the hold duration a surprisingly important factor in your tax planning. Many collectors don’t realize they should be tracking purchase dates as carefully as they track grades.
Business Sales Versus Hobby Sales—A Critical Distinction
How the IRS classifies your card sales determines what you can and cannot deduct. If you’re a hobbyist—someone who sells cards occasionally to fund their collecting habit—you must report all sales income, but you cannot deduct your expenses or losses against other income. Say you bought a pack of cards for $100, graded it, and sold it for $90. As a hobbyist, you report the $90 in income, and you simply absorb the $10 loss. You can’t write it off. If you’re classified as a business, everything changes. You report your sales on Schedule C (Self-Employment Income), and you can deduct all ordinary and necessary business expenses: card purchases, grading fees, storage, shipping supplies, and even a portion of your home office.
More significantly, you can use losses to offset other income. That $10 loss from the $90 sale now actually reduces your taxable income, potentially saving you a few dollars in taxes. The IRS uses several factors to determine whether you’re a business or a hobby: Are you regularly buying and selling cards with the primary intent to make a profit? Do you maintain detailed records? Do you invest time and effort in the activity? Do you have prior experience or training in card grading and valuation? If you’re selling twenty cards a year as a side activity, you’re likely a hobbyist. If you’re listing hundreds of cards, responding to customer inquiries, and tracking margins like a retail operation, you’re more likely a business. The problem is that this classification is fact-dependent and sometimes contentious. A $3,000 profit from casual selling is probably hobby income, but a $15,000 profit from running a structured resale operation is probably business income. There’s no bright line, which means you should document your intentions and activities clearly.
Tracking Costs and Building Your Records for Tax Time
You cannot accurately report your gains and losses without detailed records. The IRS expects you to know your cost basis for every card you sell—the amount you paid for it plus any legitimate expenses like professional grading and shipping. If you bought a card for $200, paid PSA $50 to grade it, and sold it for $450, your gain is $200 (sale price minus cost basis). That calculation is only possible if you’ve tracked the original purchase price and the grading fee. The best approach is to maintain a spreadsheet or use accounting software. Record the date purchased, the source (which seller or store), the purchase price, any processing or grading fees, the date sold, the sale price, the platform used (TCGplayer, eBay, etc.), and the resulting gain or loss.
Include a description of the card (set, card number, grade if applicable) so you can match records to any 1099-K you receive. Many collectors photograph receipts or take screenshots of purchases, then organize them by year. This sounds tedious, but it’s invaluable if the IRS ever asks questions about your income or deductions. One often-overlooked expense: if you’re a business (not a hobby), you can deduct the cost of time and materials spent photographing cards, writing descriptions, researching prices, and shipping. You can also deduct a portion of your internet bill, workspace rent or home office depreciation, and even the cost of grading guides or pricing databases. Keep receipts for everything and note what it was for. If you’re a hobbyist, these deductions aren’t available, but if you’re a business, they reduce your taxable profit.
The Most Common Mistake—Not Reporting Because You Didn’t Get a 1099-K
Many Pokémon card sellers make a dangerous assumption: “I didn’t receive a 1099-K, so I don’t have to report the sale.” This is completely wrong and is one of the IRS’s most common audit triggers. The 1099-K is a courtesy notice—it tells you the IRS knows about your income. But the IRS knows about unreported income from other sources too: customer complaints, seller reviews that mention high sales, or even suspicious patterns in your purchasing behavior. If you sold $8,000 worth of cards in 2025 on TCGplayer (above the $2,500 threshold), you’ll get a 1099-K. But if you sold $1,500 on TCGplayer and $2,000 on eBay and $1,500 through local meetups, you might not hit either platform’s threshold, yet you still owe tax on the full $5,000. Another common mistake: reporting the gross sales amount instead of the net gain. You’ll see your 1099-K showing $5,000 in sales and panic that you owe tax on the full amount. You don’t.
You owe tax only on the profit. If your cost basis was $4,000, your taxable gain is $1,000. Report the 1099-K amount on Schedule D, show your cost basis, and report your net gain. The IRS expects this reconciliation. Self-employment tax is another often-missed obligation for business sellers. If you’re classified as a business and earn $400 or more in net profit, you owe self-employment tax on top of income tax. Self-employment tax covers Social Security and Medicare and runs about 15.3% of your profit. Someone with $5,000 in net card sales profit owed as a business would owe roughly $765 in self-employment tax alone, before income tax. This is a big surprise for sellers who thought they only had to worry about income tax brackets.
Filing Deadlines and What to Do When You Receive a 1099-K
Form 1099-K is typically issued by February 28 (for paper forms) or March 31 (for electronic forms) of the year following your sales. So cards you sold in 2025 will generate a 1099-K you receive in early 2026. The IRS also receives a copy, which they match against your tax return. If you sold $4,000 of cards and report zero income, the mismatch flags your return for review. When you receive your 1099-K, verify the amount carefully.
It should match your sales records. If there’s a discrepancy—say, the form shows $5,200 but your records show $4,800—contact the platform’s support and request a correction. Errors happen. The corrected form will be issued before tax filing, and you’ll report the accurate amount. Keep the original and corrected 1099-K copies with your tax records.
How Changing Thresholds Affect Your Strategy Going Forward
The shifting 1099-K thresholds reflect the IRS’s growing focus on third-party payment systems. As the threshold drops from $5,000 to $2,500 to $600, more casual sellers will receive official reporting documents. This doesn’t change your reporting obligation, but it does change the likelihood that the IRS monitors your return. With fewer cards needed to trigger a 1099-K, your account will be in the IRS system more often, making accurate reporting even more critical.
Some sellers are strategically splitting their sales across multiple platforms to stay under reporting thresholds. This doesn’t work and is actually a red flag. The IRS expects you to report all income regardless of how many platforms you use or how you split your sales. Your tax return should reconcile all sales across all channels. If you have concerns about your filing obligations, consulting a CPA who understands collectibles is a smart investment.
Conclusion
The answer is straightforward: yes, you must report all Pokémon card sales to the IRS. You owe tax on your gains whether you receive a 1099-K or not. The key is tracking your cost basis carefully, understanding whether the IRS views you as a hobbyist or a business (which affects what expenses you can deduct), and reconciling your reported income with any 1099-K the platforms send to the IRS. The changing thresholds mean that more casual sellers will soon receive official reporting documents, but this simply codifies an obligation that existed all along.
The best practice is to treat your card sales with the same record-keeping discipline you’d apply to a small retail business. Keep detailed purchase and sale records, categorize your expenses, track your holding periods, and report accurately each year. If your card sales are substantial or you’re uncertain about your classification, spending a few hundred dollars on a CPA’s advice will likely save you multiples of that in potential penalties and interest if you’re ever audited. The IRS is increasingly focused on third-party payment systems, so the days of flying under the radar are over.
