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<p>[QUOTE=&quot;jgenn, post: 3988602, member: 78525&quot;]If you treat your coin collecting as a hobby, you are still required to pay taxes if it generates income.&nbsp; Prior to the tax changes in 2018 there was a provision to deduct hobby expenses but that has changed. </p><p><br /></p><p>&quot;IRS Tax Tip 2019-85, July 1, 2019</p><p><br /></p><p>Many people enjoy hobbies that are also a source of income. From painting and pottery to scrapbooking and soapmaking, these activities can be sources of both fun and finances. Taxpayers who make money from a hobby must report that income on their tax return.</p><p><br /></p><p>If someone has a business, they operate the business to make a profit. In contrast, people engage in a hobby for sport or recreation, not to make a profit. Taxpayers should consider <a href="https://www.irs.gov/faqs/small-business-self-employed-other-business/income-expenses/income-expenses" target="_blank" class="externalLink ProxyLink" data-proxy-href="https://www.irs.gov/faqs/small-business-self-employed-other-business/income-expenses/income-expenses" rel="nofollow">nine factors</a> when determining whether their activity is a business or a hobby. They should base their determination on all the facts and circumstances of their activity.</p><p><br /></p><p>If a taxpayer receives income for an activity that they don’t carry out to make a profit, the expenses they pay for the activity are miscellaneous itemized deductions and can no longer be deducted. The taxpayer must still report the income they receive on Schedule 1, Form 1040, line 21.&quot; -- from Tips for taxpayers who make money from a hobby<font size="4">, IRS</font></p><p><br /></p><p>In my case, I naively thought I might make money with my coin &quot;investments&quot; and I recorded the date and cost for each coin transaction so that I can handle them as &quot;investments&quot;.[/QUOTE]</p><p><br /></p>

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