Taxes and Auction Site Question

[buymycards]

You can afford a card that is worth more than $20,000? Pay your damn taxes.

[Michael B]

Sorry, but somehow his screen name seems very appropriate.

It is also what I listen to from my wife. Her portfolio throws off enough so that without working she makes about the same as I do or more. She complains that she has to pay quarterlies. It does not quite sink in that she is making free money and she has to pay the taxes.

[Casey2296]

Yes, we should all pay our taxes. But let's not lose sight of the horrendous job local, state, and federal governments do in maximizing our hard earned money for the greater good. It's a broken bureaucratic gridlock nightmare of inefficiency. They will never be satisfied and their elitist "pigs to the trough" attitude is insulting and disrespectful to the working class man and woman.

[buymycards]

Originally Posted by Casey2296

Yes, we should all pay our taxes. But let's not lose sight of the horrendous job local, state, and federal governments do in maximizing our hard earned money for the greater good. It's a broken bureaucratic gridlock nightmare of inefficiency. They will never be satisfied and their elitist "pigs to the trough" attitude is insulting and disrespectful to the working class man and woman.

When I woke up this morning I was happy to hear the snow plow going by my house. I used the public road to drive to run my errands. The police car drove past my house, and the rescue squad crew is on call. The military is protecting us. I could go on and list many more uses for our tax money, but you get the idea. And, let's not forget the Post Office (I know-they are have problems), but they don't use a nickel of tax money.

Perhaps you should run for a political office and get things straightened out, but most people would rather complain than to try to help.

[Casey2296]

Originally Posted by buymycards

When I woke up this morning I was happy to hear the snow plow going by my house. I used the public road to drive to run my errands. The police car drove past my house, and the rescue squad crew is on call. The military is protecting us. I could go on and list many more uses for our tax money, but you get the idea. And, let's not forget the Post Office (I know-they are have problems), but they don't use a nickel of tax money.

Perhaps you should run for a political office and get things straightened out, but most people would rather complain than to try to help.

I'm a huge supporter of those things you listed and happy to pay my taxes for those purposes, I'm also happy you live in a state that respects the taxpayer. I live in a State that doesn't. We don't get the luxury of such a pollyannic view.

'I'm all for boots on the ground folks in public service. I think the highest paid position should be school teacher, the lowest? school administrator. Ask your teacher friends what they think of my idea. Our State pension fund has over 130 billion dollars of unfunded liabilities, that's like two Zion rookies and a basketball movie clip... That train ran off the rails long ago.

Our City manager makes more than a US Congressman to manage a City of 75,000 people. Does that seem a good use of taxpayer money?

The City of Los Angeles- Nearly three years after city voters approved a $1.2 billion construction program over 10 years to house the homeless, the city has yet to see the first building completed. Average per-apartment costs have zoomed more than $100,000 past prior predictions to an average cost of $531,373 per unit. A cost greater than the median condo price that working folks have to pay.

My Client worth over 3 million dollars gets a check for $180,000 from the Safe Act, he doesn't need it but he took it cuz he could. Shame on him, people in need could have used that tax payer money. This shotgun approach of the Federal government giving out money to people who don't need it while people that do go hungry is a horrible use of taxpayer money.

Tax cut- My rich clients don't want it. They tell me they have plenty of money. "Give the middle class a tax cut, they're the ones who need it".

Vaccine?- my state is so inept and bad at their jobs and gridlocked into politically correct bullshit that the federal government is giving the supply directly to hospitals and pharmacies, publicly traded companies btw to get the job done.

I could go on forever with examples of the disrespect politicians and government officials have for hard working folks. The waste and misuse of funds to line their own pockets and those of their cronies is disgusting, the Mafia has nothing on these folks.

And no I shouldn't run for office, we taxpayers hire you (not you) to do a job for us and you're failing miserably, be better.

Now lets hug it out and get back to card collecting...

[Leon]

Originally Posted by Casey2296

I'm a huge supporter of those things you listed and happy to pay my taxes for those purposes, I'm also happy you live in a state that respects the taxpayer. I live in a State that doesn't. We don't get the luxury of such a pollyannic view.

'I'm all for boots on the ground folks in public service. I think the highest paid position should be school teacher, the lowest? school administrator. Ask your teacher friends what they think of my idea. Our State pension fund has over 130 billion dollars of unfunded liabilities, that's like two Zion rookies and a basketball movie clip... That train ran off the rails long ago.

Our City manager makes more than a US Congressman to manage a City of 75,000 people. Does that seem a good use of taxpayer money?

The City of Los Angeles- Nearly three years after city voters approved a $1.2 billion construction program over 10 years to house the homeless, the city has yet to see the first building completed. Average per-apartment costs have zoomed more than $100,000 past prior predictions to an average cost of $531,373 per unit. A cost greater than the median condo price that working folks have to pay.

My Client worth over 3 million dollars gets a check for $180,000 from the Safe Act, he doesn't need it but he took it cuz he could. Shame on him, people in need could have used that tax payer money. This shotgun approach of the Federal government giving out money to people who don't need it while people that do go hungry is a horrible use of taxpayer money.

Tax cut- My rich clients don't want it. They tell me they have plenty of money. "Give the middle class a tax cut, they're the ones who need it".

I could go on forever with examples of the disrespect politicians and government officials have for hard working folks. The waste and misuse of funds to line their own pockets and those of their cronies is disgusting, the Mafia has nothing on these folks.

And no I shouldn't run for office, we taxpayers hire you (not you) to do a job for us and you're failing miserably, be better.

Now lets hug it out and get back to card collecting...

My best friend continues to get a lot of money (first check was 50k) for his small company (5-6 employees) not to lay people off. He never had any intention to do so as he isn't affected. But he said everyone else was getting it so why not? That is the issue (how monies are spent) but such is life.....

As for taxes on cards, When I sold my collection the first time (a big amount for me) I reported every card and cost basis. I just handed the Heritage Auctions detailed commission to my cpa, gave him my card cost basis....and paid tax on several hundred K. I was fortunate...

.

[Casey2296]

I have to tell you Leon, I went back and looked at your Heritage Auction. Wow, I have never seen such a well curated type collection. Just amazing the collection you put together, best of luck building your 2nd one too.

[Bobbycee]

Originally Posted by Casey2296

Yes, we should all pay our taxes. But let's not lose sight of the horrendous job local, state, and federal governments do in maximizing our hard earned money for the greater good. It's a broken bureaucratic gridlock nightmare of inefficiency. They will never be satisfied and their elitist "pigs to the trough" attitude is insulting and disrespectful to the working class man and woman.

Right on Phil. Some of us collectors have serious questions and have nice collections while not being well off. We're not "Dumb SOB's"

[Rhotchkiss]

Bob, I think it is quite clear that my comment was directed solely to the OP, who is not bashful about asking advice on how to evade taxes on a public chat room/dumb. I would not call (and was not calling) you or anyone else dumb.

LOOK - taxable gain is taxable gain, regardless of whether you get a 1099 or not. As a general rule, under the US Tax code, when you make money (i.e., income), you are supposed to pay tax on that income, unless there is an exemption or a deferral mechanism (like section 1031).

The tax is applied to the "gain", again, the income. Getting your money back, is not gain/income. What you paid for something is your "basis". What you sell it for is your "amount realized". If you sell it for more than your basis, you have recognized a gain, which is taxable (amount realized minus basis = positive number). If you sell it for less than your basis, you have recognized a loss, and you should be able to at least offset gains of the same asset with that loss (amount realized minus basis = negative number).

Example: I buy Card $X for $10. My basis is $10. I later sell the card for $20. Even though I realized $20 on the sale, my gain recognized is only $10, because my basis/cost was $10 ($20 realized minus $10 basis = $10 gain recognized). In this case, there is $10 of gain and that is what tax is paid on, regardless of whether Ebay or any other auction house does or does not send me a 1099. I believe the tax rate is 28% on that $10 of gain recognized: The first $10 is a return of basis/cost, the second $10 is gain and the tax on that gain is $2.80 (28%)

[Bobbycee]

Originally Posted by Rhotchkiss

Bob, I think it is quite clear that my comment was directed solely to the OP, who is not bashful about asking advice on how to evade taxes on a public chat room/dumb. I would not call (and was not calling) you or anyone else dumb.

LOOK - taxable gain is taxable gain, regardless of whether you get a 1099 or not. As a general rule, under the US Tax code, when you make money (i.e., income), you are supposed to pay tax on that income, unless there is an exemption or a deferral mechanism (like section 1031).

The tax is applied to the "gain", again, the income. Getting your money back, is not gain/income. What you paid for something is your "basis". What you sell it for is your "amount realized". If you sell it for more than your basis, you have recognized a gain, which is taxable (amount realized minus basis = positive number). If you sell it for less than your basis, you have recognized a loss, and you should be able to at least offset gains of the same asset with that loss (amount realized minus basis = negative number).

Example: I buy Card $X for $10. My basis is $10. I later sell the card for $20. Even though I realized $20 on the sale, my gain recognized is only $10, because my basis/cost was $10 ($20 realized minus $10 basis = $10 gain recognized). In this case, there is $10 of gain and that is what tax is paid on, regardless of whether Ebay or any other auction house does or does not send me a 1099. I believe the tax rate is 28% on that $10 of gain recognized: The first $10 is a return of basis/cost, the second $10 is gain and the tax on that gain is $2.80 (28%)

Fair enough Ryan. I didn't take your comment personally, but did think it was a bit harsh.

Look, I am coming to the realization that if I sold my collection of T206, which took me nearly 20 years to carefully build, I could be wacked significantly by taxes. That's not easy to swallow. The government over reaches in their eternal grab for taxes. It's no wonder people ask many questions in advance.

Imagine the Government saying: "You want to sell your set? We'll take your top HOF's & SLers, and you can keep the rest". It about amounts to that, and that's a kick to the 'nads.

[Exhibitman]

Originally Posted by Bobbycee

Fair enough Ryan. I didn't take your comment personally, but did think it was a bit harsh.

Look, I am coming to the realization that if I sold my collection of T206, which took me nearly 20 years to carefully build, I could be wacked significantly by taxes. That's not easy to swallow. The government over reaches in their eternal grab for taxes. It's no wonder people ask many questions in advance.

Imagine the Government saying: "You want to sell your set? We'll take your top HOF's & SLers, and you can keep the rest". It about amounts to that, and that's a kick to the 'nads.

Yeah, but if someone actually kicked you in the 'nads and took your cards you could call the police (paid for by taxes) and maybe get the offender prosecuted by a district attorney (paid for by taxes) in a court (paid for by taxes) and then have the SOB sent to jail (paid for by taxes). You would drive to the court on roads (paid for by taxes) to testify against him.

If you don't like the tax policy win a majority of the legislative seats and change it. Otherwise

[lug-nut]

Originally Posted by buymycards

You can afford a card that is worth more than $20,000? Pay your damn taxes.

Billionaires dont become billionaires by giving away their money until they're billionaires

[joshuanip]

Originally Posted by lug-nut

Billionaires dont become billionaires by giving away their money until their billionaires

If baseball cards makes up billionaires we got bigger problems... Weimar style

[joshuanip]

Back to topic, make sure you guys document your cards in your wills and include in your estates, that way your decendants would get the step up and not get hit with the appreciation.

Works for your wives too. If I pass, my wife gets to realize the appreciation tax free. I’d be sad, but hey I’m dead so what...

Caveat, each state has different estate tax exemptions and Biden is eyeing the 22m tax exemption that expires in 2025. So not exactly set and forget, you may want to keep up with changes to plan accordingly.

[insidethewrapper]

I wonder if anyone is reporting the profit on these modeern cards selling at auction houses at unbelievable prices. A kid pulls a card from a foil box , get's it graded a "10", send to auction house, makes $ 100K.

[joshuanip]

Originally Posted by insidethewrapper

I wonder if anyone is reporting the profit on these modeern cards selling at auction houses at unbelievable prices. A kid pulls a card from a foil box , get's it graded a "10", send to auction house, makes $ 100K.

I think we know the answer to that, all the more reason to expect more enforcement and thus planning on our part, in the years ahead.

[swarmee]

Originally Posted by insidethewrapper

I wonder if anyone is reporting the profit on these modeern cards selling at auction houses at unbelievable prices. A kid pulls a card from a foil box , get's it graded a "10", send to auction house, makes $ 100K.

So, here's one of my "game theory" type of questions. The IRS doesn't have to audit you in only the year you submit your taxes, they have a couple of years that you're still eligible to be audited. Right?

So knowing how much unreported income is being earned in 2020 by this segment of the population, maybe they don't start auditing this class until 2022 or 2023. Give most of the dishonest sellers some rope, making them think that not reporting on their 2020 tax form went unnoticed. Then audit them next year or two years from now with two-three years of unreported income. Not entrapment, but would effectively entice them to continue cheating on their taxes. Would definitely bear plenty of fruit.

[lug-nut]

Originally Posted by joshuanip

Back to topic, make sure you guys document your cards in your wills and include in your estates, that way your decendants would get the step up and not get hit with the appreciation.

Works for your wives too. If I pass, my wife gets to realize the appreciation tax free. I’d be sad, but hey I’m dead so what...

Caveat, each state has different estate tax exemptions and Biden is eyeing the 22m tax exemption that expires in 2025. So not exactly set and forget, you may want to keep up with changes to plan accordingly.

How would the IRS know what cards I have in my wall safe or safe deposit box and wouldn't a living trust cover this issue?

[joshuanip]

Originally Posted by lug-nut

How would the IRS know what cards I have in my wall safe or safe deposit box and wouldn't a living trust cover this issue?

It would be appraised and included as part of your estate return.

[BRoberts]

Originally Posted by lug-nut

How would the IRS know what cards I have in my wall safe or safe deposit box and wouldn't a living trust cover this issue?

Do yourself a favor and stop asking for tax/how-to-commit-fraud advice on a message board. Dig into your wallet and pay a tax professional for an hour consultation. Good Lord.

[birdman42]

Well, here's the thing. Our federal tax system is based on voluntary compliance. That means you're expected to do the right thing without any prodding.

As a professional tax guy, I see the occasional person who's trying to evade paying their proper taxes. I send those people packing, for two reasons. First, I don't need the aggravation of dealing with the tax man when the client gets caught (and eventually they will get caught). Second, I don't need people like that in my life--abetting their actions is just bad juju. (Tax avoidance is fine--taking advantage of features of the tax code to reduce taxes.)

I'm with Ryan. I'm not going to answer any of your direct questions ("How much?" "How long?" etc. etc.) Doing that just leads down the path of "how about if I do it this way?" Do it right because it's the right thing to do.

Bill

[Rhotchkiss]

Originally Posted by lug-nut

How would the IRS know what cards I have in my wall safe or safe deposit box and wouldn't a living trust cover this issue?

I bet $10 you are going to tell us! Man, you are one dumb SOB

Ryan Hotchkiss

[lug-nut]

Originally Posted by Rhotchkiss

I bet $10 you are going to tell us! Man, you are one dumb SOB

Ryan Hotchkiss

really?