When Doing a Trade

[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!

[LincolnVT]

This thread brings me back to the hobby in the late 80s when nothing was graded, very little was sold, everyone traded and we all relied on the latest issue of Beckett to see if our Billy Ripken variation still had a little black arrow pointing up next to the $50.00 price. Back then if you had a decent Mantle from the 50s or 60s you were king...nobody cared about the stuff that we all chase today. I love to trade still...would still much rather work a trade deal with a collector than sell what I have just to buy another piece at auction.

[Yoda]

Way back, trading was the heart and soul of the hobby, kids had no money and trading was was really the only way to get desired cards after meagre allowances were exhausted. I got my first Mantle Bowman rookie through a trade. I was 7 years old at the time.

[ValKehl]

Bob, I was 99.9% certain that after I commented about cash-basis taxpayers, you would respond with a dissertation re cash basis vs. accrual basis, and I wasn't disappointed.

Although my comment may come across as "snarky," I truly appreciate and respect your immense knowledge of taxation and the governmental regulations pertaining thereto. While an accountant for most of my career, I never got much into taxes, so I only know enough about taxes to be "dangerous." Hence, I also truly appreciate your many efforts enlighten all of us with your tax knowledge. And, I enjoy reading whatever you post re any topic because of you excellent writing skill.

You mentioned that, "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." I resemble your remark in that I never realized that a cashless trade is taxable. I guess the real property lobby has been a much stronger influencer on Congress than the personal property lobby (if there even is such an organization).

[BobC]

Originally Posted by ValKehl

Bob, I was 99.9% certain that after I commented about cash-basis taxpayers, you would respond with a dissertation re cash basis vs. accrual basis, and I wasn't disappointed.

Although my comment may come across as "snarky," I truly appreciate and respect your immense knowledge of taxation and the governmental regulations pertaining thereto. While an accountant for most of my career, I never got much into taxes, so I only know enough about taxes to be "dangerous." Hence, I also truly appreciate your many efforts enlighten all of us with your tax knowledge. And, I enjoy reading whatever you post re any topic because of you excellent writing skill.

You mentioned that, "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." I resemble your remark in that I never realized that a cashless trade is taxable. I guess the real property lobby has been a much stronger influencer on Congress than the personal property lobby (if there even is such an organization).

Val, LOL I never take anything you say as snarky. And I know I usually write too much in responses like that, but as you know, when it comes to taxes the easy, quick answers often leave out very important points and details.

Very often when someone asks a tax related question on the forum relating to our hobby, I see a lot of partial, or even misguided and incorrect, responses that someone that doesn't know better puts out there for all to see, even though their intentions are well meaning and/or they truly thought they knew the correct answer. I just don't want to see someone reading another person's well meaning, but incorrect responses, and then use such not entirely correct info to make some potentially bad decisions tax-wise, in regards to the hobby and their collections.

I certainly don't know everything when it comes to taxes, but as a practicing CPA/accountant for over 40 years, I hope by now I know a little more than the average person. LOL And don't ever feel bad that even though you worked as an accountant in your career that you never really got into the tax side of things. I've had CPAs that I did income taxes for because they never got into into the tax side of the profession. Heck, when I first got out of college I went to work for one of the old Big Eight firms, Peat, Marwick, Mitchell & Co. (they are now called KPMG and still going strong) in their Cleveland office, and we used to joke about how it seemed none of the audit partners in the firm could even do their own taxes. A lot of people often think that someone who is a CPA/accountant automatically knows everything about income taxes, accounting, auditing, estates, business consulting, and so on, and don't realize the extent and degree of specialization that actually occurs in the profession.

I always figure that even if just a single person reading one of my "dissertations" gets some useful and helpful tax or business info out of it, then it was worthwhile. And occasionally people have PM'd me on different tax/business issues and topics I've brought up in my posts, and in a few rare instances I've even followed up with a few inquiring people via phone for additional guidance. Talking is a lot faster and easier than always having to type everything out, believe me. LOL Hopefully you (and everyone else) now know a little something more about how trades are at least supposed to be handled for tax purposes.

Anyway, happy holidays and happy New Year to you and yours!

[steve B]

Most of the stuff I want to sell is really inexpensive.

And I usually list what I'd want in cash, mostly right around what the ebay average looks like.
And then say something like "trades considered too, don't be shy I collect darn near everything"

So far almost no offers of any sort, and none recent.

Seriously, If I'm looking to offload a handful of 80's minor stars, and you catch me on the right day I might swap for a bigger pile of commons. Or if I have a smallish stack of commons and can get even something silly like an insert from one of the sets I'm more into than others.

Or like a couple hundred 80's commons that I'd trade for a couple hundred other 80's commons....
I'm generally pretty easy.