With prices soaring for Pokemon cards and Yu-Gi-Oh! cards, more and more people are saying "I sold cards I owned and got hundreds of thousands of yen" or "I resell cards on flea market apps and at card shops." The dangerous part here is the assumption that "flea market sales are tax-free." It is true that sales of household goods used in daily life, such as clothing and furniture, are non-taxable — but buying and selling for resale purposes, and sales of high-value cards exceeding 300,000 yen per card, are taxable. Where does taxation begin, how much can be deducted, and what records should you keep? Here we organize all of this specifically for trading cards.
How far "flea market sales are tax-free" actually goes
The Income Tax Act makes gains from selling movable property ordinarily necessary for daily life (clothes you no longer wear, unused furniture, old appliances, and so on) non-taxable. If you are simply letting go of cards you no longer play with for a few thousand to a few tens of thousands of yen, no tax arises within this scope.
However, this non-taxable treatment has two major exceptions.
- Exception 1: resale purposes and continuous trading — buying in order to sell for profit is not a sale of household goods but miscellaneous income (or business income, depending on scale). Buying booster boxes to sell singles, reselling lottery-allocated products, and repeatedly buying and selling based on market prices all fall here
- Exception 2: precious metals, artworks, antiques, and similar items exceeding 300,000 yen per item (per card) — high-value cards with strong collectible character can be treated not as household goods but as assets subject to capital gains tax (joto shotoku). Even when selling off an entire collection upon retiring from the hobby, watch out for marquee cards that exceed 300,000 yen per card
For the basics of flea market apps and point-earning activities in general, see Taxes on point-earning activities and flea market sales.
Three taxation patterns, organized
| Pattern | Income category | Tax calculation |
|---|---|---|
| Disposing of cards you no longer play with (low value, one-off) | Non-taxable (household goods) | No filing needed |
| Selling high-value cards from a collection (over 300,000 yen per card, etc.) | Capital gains (aggregate taxation) | A special deduction of 500,000 yen can be subtracted from the gain. If held for more than 5 years, only one half of the remainder is taxable (long-term capital gains) |
| Continuous trading for resale purposes (buying to sell) | Miscellaneous income (business income depending on scale) | Sales minus expenses such as purchases, shipping, and fees. The 500,000 yen deduction cannot be used |
Example: one card from an old collection sold for 450,000 yen (acquired for 1,000 yen, held for more than 5 years)
- Gain on sale: 450,000 yen − acquisition cost of 1,000 yen (if unknown, 5% of the sale price can be used as a deemed acquisition cost) ≒ approx. 428,000 yen
- Within the 500,000 yen special deduction → zero taxable income, no filing needed (if there are no other capital gains subject to aggregate taxation)
Example: resale purposes, with annual sales of 3,000,000 yen and purchases etc. of 2,400,000 yen
- Taxed as miscellaneous income of 600,000 yen, combined with salary and other income. No 500,000 yen deduction. For a company employee's side business, a tax return is required because it exceeds 200,000 yen
Common stumbling points
- The "no filing needed if 200,000 yen or less" rule applies to income tax only: even if a company employee's side-business miscellaneous income is 200,000 yen or less, a separate residence tax (local inhabitant tax) filing is still required
- Records of acquisition costs are everything: without purchase receipts, flea market app purchase histories, or records showing a card came from opening packs, you cannot prove your expenses or acquisition costs, and in the worst case only "5% of the sale price" can be used as the acquisition cost. Even screenshots from apps are worth keeping as transaction records
- Sales on flea market apps and at card shops can be traced: platform transaction records and secondhand dealers' purchase records are information that can be cross-checked later. Going unfiled on the assumption that "cash in hand can't be traced" means taking on the risk of back taxes and penalty taxes. To recover from an unfiled state, see Coming back from non-filing
- Students and dependents: this also affects your parents' dependent threshold: miscellaneous income from reselling counts toward the income used in determining dependent status for your parents
- If you do it repeatedly, you need a secondhand dealer license (kobutsusho): conducting the business of buying and selling used goods requires a secondhand dealer license (a separate regulation from taxes, but check it together)
What to do today
What to do today
- Write out a spreadsheet listing the cards you sold this year (sale price and where you sold them) plus whatever acquisition records you can find
- Use the table above to determine which pattern you fall under: "disposal," "high-value collection sale," or "resale"
- If you are the resale type, create a folder today for keeping receipts for purchases, shipping, and fees
FAQ
Q. I'm quitting the hobby and selling my whole collection for 1,000,000 yen. Will I be taxed?
A. It depends on the breakdown. For the portion sold as a disposal of household goods — cards worth 300,000 yen or less per card — there is room to treat it as non-taxable, but gains from selling high-value cards exceeding 300,000 yen per card can be subject to capital gains tax (with the 500,000 yen special deduction). If you collected them for resale purposes, it is miscellaneous income. If in doubt, record the breakdown and check with a tax office or a tax accountant.
Q. If I sell a high-value card I pulled from a pack, is the acquisition cost the price of the pack?
A. In practice, the cost incurred to acquire that card (the pack price) is used as the basis. Without records of the pack opening, proof is difficult, and there is also the method of using 5% of the sale price as a deemed acquisition cost. If you pull a high-value card, it is safest to keep the purchase receipt and a record of the opening.
Q. If I take a loss, can I offset it against other income?
A. In principle, no. Losses from selling a hobby collection are disregarded, and a deficit in miscellaneous income cannot be aggregated with salary income either. Resale losses can only be offset within miscellaneous income of the same year.
Q. Do I also need to report sales made on overseas marketplaces?
A. Yes. For residents of Japan, gains from sales via overseas sites are also taxable. Keep records in yen using the converted exchange rate.
References (sources)
* This article is general information. The determination of the taxation category depends on the actual substance of the transactions. For large amounts, please check with a tax office or a tax accountant.