When Doing a Trade

[isiahfan]

As a CPA...who actually also worked at the KPMG office in Cleveland...of all places...I would like to say Bob is going a bit overboard. While technically right...if everyone reported every gain/loss on every transaction...well you get the point.

A lot of people on here are only pre-war...which limits trading in large groups...but I remember a group in the late 90s where you had a basic trading philosophy....you listed what you would "accept"...i.e. any Wade Boggs cards with a BV$ of over $5...any Topps Yaz base cards...etc. You would then see what others in the group requested....i.e. any 1968 Topps card in ExMt or better condition and you would send in what you had that met other's needs until you had at least $100 in trading credit. The person running the trades took 10% off of the top to compensate their efforts...(fair enough IMO) so you would need to submit $110 to get back $100. The coordinator would then facilitate and ship on their dime as part of the 10%. So if you collected Stan the Man...and someone else collected Kaline...it was easy enough. People could get rid of extras while giving up 10% to get something they wanted. Not like you guys are talking about PSA 3 and a PSA 3 (sane card) where eye appeal makes a $300 difference. I 100% agree with you guys...but man the simple fix is...here is what I collect.... here is what I have...is much easier when your wants/needs are not sooooooooo specific. I would love if Net54 had such a trade center...but I know it's a lot of work.

[BobC]

Originally Posted by isiahfan

As a CPA...who actually also worked at the KPMG office in Cleveland...of all places...I would like to say Bob is going a bit overboard. While technically right...if everyone reported every gain/loss on every transaction...well you get the point.

A lot of people on here are only pre-war...which limits trading in large groups...but I remember a group in the late 90s where you had a basic trading philosophy....you listed what you would "accept"...i.e. any Wade Boggs cards with a BV$ of over $5...any Topps Yaz base cards...etc. You would then see what others in the group requested....i.e. any 1968 Topps card in ExMt or better condition and you would send in what you had that met other's needs until you had at least $100 in trading credit. The person running the trades took 10% off of the top to compensate their efforts...(fair enough IMO) so you would need to submit $110 to get back $100. The coordinator would then facilitate and ship on their dime as part of the 10%. So if you collected Stan the Man...and someone else collected Kaline...it was easy enough. People could get rid of extras while giving up 10% to get something they wanted. Not like you guys are talking about PSA 3 and a PSA 3 (sane card) where eye appeal makes a $300 difference. I 100% agree with you guys...but man the simple fix is...here is what I collect.... here is what I have...is much easier when your wants/needs are not sooooooooo specific. I would love if Net54 had such a trade center...but I know it's a lot of work.

Hey Isiahfan, when were you working at the Cleveland KPMG office? It was definitely long after I had been there it sounds like. I wonder if anyone I had worked with was still there when you were, let me know when you were there.

Anyway, I had mentioned in an earlier post that no one is likely going to go ahead and report all these trades and such as taxable sales. I was merely pointing out how whether they want to believe it or not, that is what they are supposed to be doing. The IRS really doesn't want to mess with this kind of stuff either, but I've always found it a good idea to educate people so they at least know what they're supposed to be doing. Then they can decide how they want to handle it themselves, or if they just ignore it because they figure the odds are the IRS will never find out and come calling.

And if people are aware of what they should have been doing all along, even if they didn't do it, should the IRS ever come knocking on their door, they may be able to better handle the situation and at least not inadvertently say or do something to make things worse.

And thank you for confirming to everyone that what I was saying is true. But you can drop the "technically" part, because what I said is just plain true and not overboard at all. It is just an area of tax law that most people either ignore, because they feel the chances of the IRS ever coming after them are virtually nil, or they simply didn't know about it. And it can especially make a bigger difference to someone who is a dealer. I know Adam (Exhibitman), who I was specifically responding to in a couple earlier posts, talked about setting up at shows and doing trades from sales inventory. So I was also going into a little more detail so he could maybe better see and understand the kind of tax reporting issues and liability he might also have as a dealer doing trades. This way, he at least knows what he is supposed to be doing, and can then better decide how he wants to handle and report such trading transactions for himself, going forward.

I'm not sure how trying to show factual information like this to people who may not have otherwise known, or fully understood, what they needed or were supposed to do tax-wise in regards to a trade or barter transaction could ever be considered as going "overboard". Especially in light of the reality of how cards prices have been surging of late. Nowadays, you are just as likely to see people discussing trades for cards worth thousands of dollars as you are to see a couple collecting buddies swapping $20 cards. In fact, it may be more likely for the cards worth thousands. And the larger the dollar values involved in such card swaps, the more likely the IRS would take interest in finding out about it. Just look at some of the offers and cards people are looking to trade that are showing up in the BST threads these days.