Quote:
Originally Posted by Johnny630
Unless you have a son or sons whom love the cards and hobby as much as we do I 100% believe it’s better to Leave your family wealth not cards. By wealth I mean equities, real estate, and cash.
If your sons love the cards, slowly give them some cards as you get older. To me it makes me happier as I grown older to give then receive. I have more enjoyment seeing my kids happy then clutching the cards forever.
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You may give your sons (or daughters) some of your cards to hold and enjoy as you get older, but I wouldn't formally gift the cards to them. I would be sure to retain ownership of them in my name until passing, and then specifically be sure to have named my collection as going to one or more of them as heirs in a will. Reason being that for now, under current estate tax law, anything a person leaves to their heirs in passing gets a "step-up" in tax basis to the inherited item's current fair market value as of the date a person passes away.
If you give/gift cards to your children while you're still living, the tax basis of those cards in their hands is a "carryover" basis equal to your tax basis (ie.:what you originally paid to acquire the cards and get/keep them in their condition at the time of your gift). Depending on how long ago someone acquired their cards, and what was originally paid for them, waiting to formally transfer ownership of them to your children as part of your estate could end up saving your kids a lot of tax should they ever sell some your collection down the road then.
Also, if you gift your cards to your kids while you're still vertical, you technically need to be able to give them your tax basis in each and every card so they know what it is should they ever go to then sell one or more of them. Waiting to let them inherit the cards can remove the burden and issues from not having kept complete and accurate records of all your card's tax basis'.
And I know how many in the hobby look to get around paying income and sales taxes on their cards when they do sell them, every chance they get. Even if it basically means committing tax fraud/evasion by not properly reporting taxable card sales when they occur. Well, here's one technically legal way to possibly get around a big tax hit for a collector who goes to sell off their collection. If you have a significantly older, close relative, most likely a parent, formally gift them your card collection. You can technically still keep and maintain the cards for your elderly relative, as their custodian so to speak. But then also have your elderly relative include in his/her will that upon their passing the card collection goes to you. In that instance you get a "step-up" in the collection's tax basis to its' fair market value on the day your relative passes. You can use your lifetime estate/gift tax exclusion amount, along with your annual gift tax exemption amount, to transfer your collection into your elderly relative's name with likely no tax consequences.
Does require a little work and effort, and their could be unforeseen consequences as the collection for a time is then legally part of your relative's assets/estate. But technically a legal way to possibly get around paying some taxes on the sale of one's collection.