WHEN A FRIEND TOLD me about his newfound interest in buying and selling sports trading cards, it reminded me of the joy that collecting brought me in my childhood. And when he asked me to explain the relevant taxation, it got me thinking: The core of the tax code is more logical than we give it credit for. It’s the ever-changing details that make it squirrelly. If you buy and sell collectibles—whether it be sports cards, coins or antiques—the tax code assigns your activity to one of three tracks: HobbyInvestmentBusiness What factors determine the tax track you should follow? It’s a...
