When Doing a Trade

[Johnny630]

The most productive and powerful leverage you have in Trade is Cash. If you see something you want buy it and sell what you were considering trading.

[Eric72]

Originally Posted by Johnny630

The most productive and powerful leverage you have in Trade is Cash. If you see something you want buy it and sell what you were considering trading.

There is a taxable event in there to consider.

Trading cards and leaving cash out of the equation might turn out better, financially speaking.

[BobC]

Originally Posted by Eric72

There is a taxable event in there to consider.

Trading cards and leaving cash out of the equation might turn out better, financially speaking.

That isn't entirely true. Even if you straight up trade cards for cards, and no cash trades hands, that is a barter transaction and the IRS views it as a fully taxable event.

[Casey2296]

I've had several successful trades with members here, sometimes it's the only way you can get a specific card from another collector.

[Leon]

Originally Posted by BobC

That isn't entirely true. Even if you straight up trade cards for cards, and no cash trades hands, that is a barter transaction and the IRS views it as a fully taxable event.

Go get 'em Bob...
.

[Carter08]

A fun trade string I did through net54 was going from Cobb t227 to Cobb t206 red to e93 Honus and Cy Young. I will always miss those Cobbies but it was fun.

[Tao_Moko]

I have had successful trades here. Exclusively when both parties have something that doesn't fit their wheelhouse. An example is I don't collect hockey cards but end up with them at times. I do collect baseball, boxing and football though. I'm easy to deal with and can weight a trade in favor of the other party. I did trade successfully T206 in person with a member here who lived in the same town as me. RIP Dr. Manning

[kmac32]

I trade as a collector. I look at value of the cards but more importantly I fill in holes in my own collection. I have had people offer me many times over for certain individual cards in my collection but if the trade or deals leave a hole in my collection that can’t be repaired the it is a no go.

[parkplace33]

Problem with trading is many collectors tend to overvalue their cards.

[ValKehl]

Originally Posted by BobC

That isn't entirely true. Even if you straight up trade cards for cards, and no cash trades hands, that is a barter transaction and the IRS views it as a fully taxable event.

Bob, this seems totally contradictory to me if one is a cash-basis taxpayer for income tax purposes, which I believe most individuals are.

[Stampsfan]

Whatever happened to the guy who was going to trade some obscure card up for a 52 Topps Mantle, and was tracking it. He ended up getting a lot of commons and it died slowly, IIRC.

[nebboy]

Originally Posted by Stampsfan

Whatever happened to the guy who was going to trade some obscure card up for a 52 Topps Mantle, and was tracking it. He ended up getting a lot of commons and it died slowly, IIRC.

I was the guys that made the 1st trade with the (trade up to a 52 mantle) guy when I gave up some lesser T206 hof cards ect., for a graded 3 veg 205 Johnson, I took a little heat over that one because some felt I gave to much or they didn't like that guy or what he was trying to achieve. His quest did flame out after a few trades and I beleave after trying another hobby related start up, ended up moving away from Net54.

Still have that T206 Johnson

[bnorth]

Originally Posted by nebboy

I was the guys that made the 1st trade with the (trade up to a 52 mantle) guy when I gave up some lesser T206 hof cards ect., for a graded 3 veg 205 Johnson, I took a little heat over that one because some felt I gave to much or they didn't like that guy or what he was trying to achieve. His quest did flame out after a few trades and I beleave after trying another hobby related start up, ended up moving away from Net54.

Still have that T206 Johnson

I believe he left after trying to screw a guy in a set break on the Mantle. After some time he finally made the person right on the card. He would buy very obvious fakes on eBay. Then come on here and complain about the scammers on eBay selling fakes for pennies on the dollar.

[MVSNYC]

"Trading is the most fun part of the hobby to me. I do tons of trades with my collecting buddies."

I'm with Luke...I do a ton of trades, with many members here (Hi Luke); most are top T206 collectors...and quite frankly some big cards are often involved.

[Belfast1933]

For me, it’s an easy explanation why I haven’t made any trades here… it’s simply twice as hard as simply buying (or selling) for cash

For a trade to work, there are 2 transactions in play simultaneously - first, the value of the card I want and, at the same time, the value of the card I will give up. And then there is all the squishy, messy stuff in between those 2 values

I prefer the simplify of a straight purchase or a straight sale… it’s almost like a trade, in a way. But it involves 3 parties instead of two.

[BobC]

Originally Posted by ValKehl

Bob, this seems totally contradictory to me if one is a cash-basis taxpayer for income tax purposes, which I believe most individuals are.

Hi Val,

The IRS views businesses and people as keeping their records in one of two acceptable manners, either on an "accrual basis" or a "cash basis". Both of these refer to when a taxpayer, an individual or business, recognizes income or expenses for tax purposes. If you are on the "accrual basis", income or expense is recognized when a taxpayer becomes liable for the receipt or payment of some bill or invoice. If on the "cash basis", it is recognized when actually paid or received.

A company/individual selling cards that is on the accrual basis for tax purposes sends cards and an invoice to a customer dated today, 12/26/2021, and the customer receives it and sends payment back to the company/ individual on 1/5/2022. Because the seller is on the accrual basis, they recognize the sale of those cards on 12/25/2021 as taxable income in 2021 (assuming the company/individual uses the calendar year as its taxable year), even though they didn't receive payment of their invoice till the following taxable year. Had the seller been on the cash basis instead, they wouldn't recognize the income from the sale until the following year, 2022, when the payment was actually received.

The term "cash basis" itself refers to the timing of when a taxpayer recognizes income and expenses for income tax purposes, it does not necessarily refer to or just mean actual cash paid or received.

Now take the card selling company/individual in my example. Instead of being paid in cash for the cards they sold, they could agree to be paid in goods or services instead. And by goods, that includes cards they received as payment for the cards they just sold. You, or others, may call that a trade, but the IRS calls it a taxable sale or exchange. It doesn't matter if it is individuals or companies involved in such a deal/trade, it is still considered a taxable exchange to both parties by the IRS. There is also the possibility that some people think such a trade isn't taxable because it is considered as a like-kind exchange, where the tax liability is deferred, but under current tax law, like-kind exchanges only apply to real estate.

The parties (usually individuals) in a card trade don't normally have either side reporting the trade to the IRS, so the IRS normally has no other way to know about such activities, and doesn't really have the time or resources to go after these people. But that doesn't mean you're still not supposed to report such trades as taxable sales on your income tax returns. It is kind of similar to how people that win something from an AH that doesn't charge them sales tax for the state they're in normally don't bother to voluntarily report and pay the resulting sales/use to their state, like they're supposed to. People know that in either instance, the chances of them getting caught is almost nil, so they don't bother.

As you said, pretty much all individuals are considered "cash basis" taxpayers, and generally only actual registered businesses can get treated as either "cash basis" or "accrual basis". And for the record, when someone does execute a taxable trade of one card for another, if no cash is involved, you are supposed to assume that the current FMV of the card you received at the time of the trade is equal to the amount of cash you would have received had you just sold the card outright. And you use that FMV to report the deemed sale on your tax return, and to then figure any gain or loss you may have for tax purposes.

[Piratedogcardshows]

I have pulled some trades off as recently as this year on the site. I always enjoy trading and have benefited and been on the lesser side. Yin and yang.

[Bram99]

The problem that has been described here is ancient. In fact, it gave rise to the concept of money as a medium of exchange. It can be substituted for very diverse goods.

The first known form of currency was the Mesopotamian Shekel from around 5,000 years ago. Likely there were similar quibbles to the one in this thread, when a wheat farmer had too much wheat but really wanted some goat milk.

Today, it can be used as a medium of exchange (to buy or sell) a PSA 3 T206 Ty Cobb with poor centering. The money proceeds from a sale like this could be used to buy a different T206 Ty Cobb graded by a different TPG. Or it can be used to even out a trade involving the two cards in the example.

The key issue in any of these examples is the need to come to an agreement on relative value. That problem is also ancient and didn't arise with the advent of price guides, the rise of card "investors" or card dealers, or third party grading.

So if you can't think of a fair trade, try using cash to help even things out! If that doesn't work, you probably weren't likely to have a meeting of the minds in a buy/sell transaction either, so might as well move on and find a new trading partner!