If you are investing on a sports card investment platform like Collectable, where you own a fraction of or a % of a card:
- Sale of card: If the card is sold, you receive the equivalent of a dividend. Your profits are then taxed as income.
- Secondary market: If you trade your shares on the secondary market, your profits are taxed as capital gains.
For those of you selling a sports card you purchased, card investments are classified as 'collectibles.' Gains on cards held for one year or less are taxed as ordinary income—the same tax treatment as short-term capital gains (STCGs). Gains on cards held more than one year are taxed as ordinary income, except the maximum tax rate is 28%