When Doing a Trade

[samosa4u]

NEVER EVER EVER trade with a dealer because he will try to ROB the hell outta' you! I've had dealers try to make ten-thousand profit on our trades and it's ridiculous! Only trade with collectors!

[rjackson44]

Lost art

[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.

[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.

[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.

[BobbyStrawberry]

Originally Posted by rjackson44

Lost art

I've tried many times, but I have yet to complete a trade on here!

[Leon]

Originally Posted by BobbyStrawberry

I've tried many times, but I have yet to complete a trade on here!

As the other member and I were talking about it is not easy to trade nowadays.
.

[vintagetoppsguy]

I've had many successful trades on here - one just last week (Thanks, Bill ).

[bnorth]

I have done easily over 100 trades on this forum. Usually smaller dollar value stuff. My biggest trade on here was a 1952 Topps Eddie Mathews for a T206 Red Cobb.

I still prefer to trade anytime possible.

Some people do have a very interesting idea of what a fair trade is. I just avoid trying to do trades with them.

[grainsley]

I think "The Guide" started the destruction of trading as I knew it in the early '60's as an 11 year old. Back then, we all knew that cards were a penny each when they came in a pack of 4 with a stick of gum. It didn't much matter if you had a Killebrew that I needed, and I had a Bob Turley that you needed, the deal was done, since we both came out ahead getting cards we needed if they were just dupes to you anyways. The Guide started the demise, later to be followed by the complete devastation of trading when grading finished the job. Greed and the need to come out ahead dug the hole in the cemetery for trading.

Grant

[chadeast]

I completed a 2-for-2 T3 Turkey trade with a board member earlier this summer. All ungraded which probably helps, and I kicked in some cash due to the lesser condition of the ones I was trading away. Trading among reasonable collectors is still very doable.

[MuncieNolePAZ]

I have probably completed around 50 trades with members on here. I have never had any issues. There is certainly some give and take and understanding that if you are trading multiple cards for a single card, you will usually have to give a little more. I definitely prefer to trade over buying and selling when possible.

Chad

[Exhibitman]

Originally Posted by samosa4u

NEVER EVER EVER trade with a dealer because he will try to ROB the hell outta' you! I've had dealers try to make ten-thousand profit on our trades and it's ridiculous! Only trade with collectors!

Dealers try for profits?!?!?!? In other news, rain is wet and the sun rises in the east.

But seriously, if you're dealing with a dealer you have to expect to get clipped. The only question is degree. Bring a box of 1970s commons to my table and you are going to get a penny a card. Bring me a 1952 Topps Jackie Robinson and you will do a lot better, percentage-wise, but there still has to be some meat on the bones to allow me a profit. Now, if you got 'robbed' by a dealer it means you were blind without a cane, my friend: you didn't do your homework, unless you were trading obscurities, in which case you both probably didn't know what might happen. As I said, uncertainty is one of the dangers of dealing in rare items. I auctioned off a rare card recently and ended up losing 75% of my cost because it was rare and I seriously overvalued it when I acquired the card years ago.