Quote:
Originally Posted by RCMcKenzie
I am not a tax attorney, but there are many on here who can chime in.
I don't view baseball cards as a commodity on par with gold. "I bought this gold brick of 5 ounces at x price in 2015 and I'm trading now for 8 ounces of gold." in this example, you have a gain.
If you bought an sgc 4 Ty Cobb with an Old Mill back in 2015, and today you trade it for a PSA 2 Ty Cobb with an Old Mill Back, and a Larry Doyle E103 CSG 4 undergraded, then I think you don't realize a gain until you sell, years down the road with your original buy price of your sgc 4 cobb as your basis.
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Rob,
You missed Nic's point about how there is no longer any Like-Kind Exchange tax rule in place for collectibles. If Nic just trades his card for someone else's card(s), he doesn't offset the current card values and end up with no tax due. He has to take what he originally bought his card for years ago, which then became his tax basis in that card, and compare it to the current FMV of the card(s) he trades it for. The difference in his card's tax basis, and what the current FMV of the card(s) he traded for, is current taxable gain to Nic. Even if there is no cash involved.
We both know of course that a lot of collectors doing such a private deal will likely not report anything about the trade/sale to the IRS, and thus pay no tax on it. Especially since in a trade, there really isn't any third party required to prepare and file a 1099 for either party to the trade, and then send a copy to the IRS as well. But I've said this before here on the forum, many times prior to Nic, that trades are considered the same as taxable sales of cards for cash by the IRS. And the same goes for any dealers that get involved in a trade as well. It is up to the collectors/dealers to be honest and calculate their gain/income on such a trade, and then report it on their income tax return(s) and pay the resulting taxes due.