Rips by Triumph Taxes

Liamdemitri
Liamdemitri Member Posts: 6 Newcomer
in Filing my taxes

I have been utilizing this website for some time this year called RIPS by Triumph. It's an online Pokémon and Basketball trading card website where you can purchase packs at different prices, pull random cards, and either sell back or have them shipped to your house.

I've put a substantial amount of money into the site and withdrawn close to the same amount. For example, Deposits =$75000 Withdrawels=$76000.

Am I liable for all $76000 I've withdrawn in taxes or just the $1000 in net gains?

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Answers

  • MatthewD
    MatthewD FreeTaxUSA Admin, FreeTaxUSA Agent Posts: 1,031 image
    Hello Liamdemitri,

    You are only taxed on your net gains. Sales - purchases = net gains. The deposits are not your primary purchase, but your initial investment. If you make a sale and then reinvest it in another purchase before your withdrawals, your total purchases and sales may be much greater than your total deposits and withdrawals.

    See if you have some sort of statement showing your total purchases and sales. That is what needs to be reported on you tax return.
  • Liamdemitri
    Liamdemitri Member Posts: 6 Newcomer

    The company says they do not track pack sales and buy backs. Do I use my deposits and withdrawals as a good faith estimate?

  • MatthewD
    MatthewD FreeTaxUSA Admin, FreeTaxUSA Agent Posts: 1,031 image

    Hello Liamdemitri,

    Thanks for the follow-up question. Does Triumph have any sort of account buy and sale history? If so that would be a good source for evidence. I recommend you keep some sort of spread sheet of you purchases and sales going forward.

    Using your deposits and withdrawals can be used to make a good faith estimate. See this article about selling collectibles.

    https://community.freetaxusa.com/kb/articles/223-how-to-report-the-sale-of-a-collectible?

  • Liamdemitri
    Liamdemitri Member Posts: 6 Newcomer

    I reached out to them directly and they do not have a buy or sale historical transaction log for cards purchased and sold back regardless of gain or loss.

    With this being entered into for profit, and with the proper Tax Expert or CPA handling my refund, would this likely receive an audit without the transaction log or does the Deposit and Withdrawal statement serve as a well enough established list to truly value gains/losses?

  • KristineS
    KristineS FreeTaxUSA Agent Posts: 301 image
    Hello again Liamdemitri,

    A tax return can be 100% accurate and still audited.

    Filing an accurate tax return that includes trading activity would be an important first step. Detailed, back-up documentation that supports the trading activity numbers shown on the return is equally important. When the IRS chooses to audit a tax return, generally the more detailed and accurate the documentation provided, the better.

    Deposit and withdrawal dates and amounts, date of original purchase/sell, amount of cards bought/sold, original purchase/sales price, etc., all these serve to substantiate the information claimed on a tax return to show gain or loss.

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