Justifying a Big Purchase

[Snapolit1]

I do agree that unless you have to sell shortly after purchase you can get back at least half your money after fees on popular vintage cards. More if you don't pay taxes.

Pretty absurd statement me thinks. If I buy a quality vintage card at a nice AH like LOTG or Heritage for $30,000 and have to sell it, I will get back less than $15,000? No. That's a very unlikely outcome. Not impossible but pretty unlikely. I track a few hundred vintage cards, and very very few of them have dropped 50% in value. Actually probably zero of them.

And there wouldn't be any tax liability if you bought a card and sold it for a huge loss, so I'm not sure what that means.

I haven't sold one vintage card at a 50% loss and don't know anyone who has. Maybe I've lost 10-15% but that would be the most. And on 95% of my sales I have made a profit.

[bnorth]

Originally Posted by Snapolit1

I do agree that unless you have to sell shortly after purchase you can get back at least half your money after fees on popular vintage cards. More if you don't pay taxes.

Pretty absurd statement me thinks. If I buy a quality vintage card at a nice AH like LOTG or Heritage for $30,000 and have to sell it, I will get back less than $15,000? No. That's a very unlikely outcome. Not impossible but pretty unlikely. I track a few hundred vintage cards, and very very few of them have dropped 50% in value. Actually probably zero of them.

And there wouldn't be any tax liability if you bought a card and sold it for a huge loss, so I'm not sure what that means.

I haven't sold one vintage card at a 50% loss and don't know anyone who has. Maybe I've lost 10-15% but that would be the most. And on 95% of my sales I have made a profit.

Fair point so lets do some math. I do not know the actual numbers so please provide them for me on a $30k purchase.

At $30K you are the person who will pay the most for that card so lets use the underbidders bid as what you can really sell it for. Then take off the buyers and sellers premium and the tax liabilities being a collector and not a business and what do you have left. Seriously I am curious.

[G1911]

Originally Posted by bnorth

Fair point so lets do some math. I do not know the actual numbers so please provide them for me on a $30k purchase.

At $30K you are the person who will pay the most for that card so lets use the underbidders bid as what you can really sell it for. Then take off the buyers and sellers premium and the tax liabilities being a collector and not a business and what do you have left. Seriously I am curious.

Another factor for many buyers is the sales tax. Every card I buy costs me more than 10% extra to pay off my county. To flip it, I need to make more than 10% of the previous sale just to cover my initial actual bill.

[bnorth]

Originally Posted by G1911

Another factor for many buyers is the sales tax. Every card I buy costs me more than 10% extra to pay off my county. To flip it, I need to make more than 10% of the previous sale just to cover my initial actual bill.

Great point on the extra sales tax. I found it strange but ebay even charged me tax on an item I recently purchased from the UK.

[BobC]

Originally Posted by bnorth

Great point on the extra sales tax. I found it strange but ebay even charged me tax on an item I recently purchased from the UK.

Sales/use tax doesn't matter on where an item comes from, it is all based on where it is going to.

[bnorth]

Originally Posted by BobC

Sales/use tax doesn't matter on where an item comes from, it is all based on where it is going to.

Thanks, Bob, Now I feel stupid because as someone who had to pay different tax rates depending on the city I was selling in I should have known that.

[BobC]

Originally Posted by bnorth

Thanks, Bob, Now I feel stupid because as someone who had to pay different tax rates depending on the city I was selling in I should have known that.

Yeah Ben, and great point about even different cities. The sales/use tax laws vary by state. Five have none, the remaining 45 do, and then among the 45 that do some also have additional county/local sales taxes that get added on top. In Ohio where I'm at the sales tax rates vary by county. The state itself has a flat 5.75% sales tax rate across the entire state, and then the local/county authorities tack on what they can. Cuyahoga County, which encompasses Cleveland, has the highest combined rate in the state at 8.0%. If you live in a state like that, if possible, you could try to set up a P.O. Box or other address you get you mail delivered to in say the next county over that has a lower sales tax rate. Would definitely work if buying off Ebay as they charge sales tax based on the mailing address. But doing so would technically not be legit, and also the amount of savings would be nominal, at best, and likely eaten up by the cost of renting the P.O. or other mailbox, along with the gas and other related costs and additional time spent from having to drive a ways to pick up your mail. Probably more trouble than it is worth doing. Now if you have a close relative or really good friend that lived in that next county over....................

[ClementeFanOh]

Great, a compelling topic is once again off the rails. The poster is NOT
interested in 'flipping it" and said as much. Save that nonsense for another
thread or- here's a thought- start another thread. "Seek life elsewhere"!

Trent King

How often can you get on point commentary and a GI Jane reference in one
short message?

[G1911]

Originally Posted by ClementeFanOh

Great, a compelling topic is once again off the rails. The poster is NOT
interested in 'flipping it" and said as much. Save that nonsense for another
thread or- here's a thought- start another thread. "Seek life elsewhere"!

Trent King

How often can you get on point commentary and a GI Jane reference in one
short message?

If one is spending what constitutes a lot of money for them, the ability to turn back into cash if they need too should be considered. 0 of my cards were bought with the intent to sell, but if I really need to, it's good that I can flip them and keep a roof over my head. If you're putting a lot of money into an item, you could factor in what happens if your life regresses.

I guess you haven't had a meltdown for a couple months though, so go ahead. You're due for another tantrum.

[Mark17]

Originally Posted by G1911

If one is spending what constitutes a lot of money for them, the ability to turn back into cash if they need too should be considered.

One can never turn a vacation, attending sporting events, movies, going to restaurants, bars, the circus, and so on "back into cash" at all.

The point isn't to try to calculate the percentage profit (or investment retention) of a hypothetical card, in a possible future sale. The point is, of all the ways people can find enjoyment in life while laying out cash, buying cards is far more fiscally prudent than most. And therefore, I would suggest, something that should let the OP's mind rest easy in that decision.

[G1911]

Originally Posted by Mark17

One can never turn a vacation, attending sporting events, movies, going to restaurants, bars, the circus, and so on "back into cash" at all.

The point isn't to try to calculate the percentage profit (or investment retention) of a hypothetical card, in a possible future sale. The point is, of all the ways people can find enjoyment in life while laying out cash, buying cards is far more fiscally prudent than most. And therefore, I would suggest, something that should let the OP's mind rest easy in that decision.

I am not disagreeing with you whatsoever. Any card is a better return than going to a bar.

I think one should factor in, if they are spending more than say 5% of their cash on a cardboard picture of a dude, what they could turn that back into if they needed to, and the likelihood they will gain or lose. If you end up needing cash, how much you can get back is very relevant. That it is a better return on investment even if craters than wasting money on booze or food or circus trips isn't the only comparison.

[Rhotchkiss]

Originally Posted by bnorth

Fair point so lets do some math. I do not know the actual numbers so please provide them for me on a $30k purchase.

At $30K you are the person who will pay the most for that card so lets use the underbidders bid as what you can really sell it for. Then take off the buyers and sellers premium and the tax liabilities being a collector and not a business and what do you have left. Seriously I am curious.

Ben, for a $30k(ish), you are not paying a seller’s premium. In fact, you should get a portion of the buyer’s premium. And you have no tax liability if you sell a card at a loss- you have no income, only partial recovery of basis which was after tax dollars and which is not taxable. So, your loss is likely your cost (including taxes and shipping), minus the hammer + whatever portion of the BP you may be able to negotiate.

[Snapolit1]

Originally Posted by bnorth

Fair point so lets do some math. I do not know the actual numbers so please provide them for me on a $30k purchase.

At $30K you are the person who will pay the most for that card so lets use the underbidders bid as what you can really sell it for. Then take off the buyers and sellers premium and the tax liabilities being a collector and not a business and what do you have left. Seriously I am curious.

1. No one in their right mind pays a seller's commission consigning a $25,000 card. If they do, frankly, they are uninformed.

2. There is no tax ramification of me buying a card for $30,000. Or a million dollars.

3. If I sell something for more than I bought it for, only then do I owe taxes. And then, by definition, I haven't lost money on the sale.

4. If I bought a nice vintage card for $30,000 and had to sell literally tomorrow, ok, maybe I sell it for $28,000 or $27,000 in the next auction, WORST case scenario.
That's no doubt where the runners up landed. And I've lost maybe 10%. Nowhere near 50%.

5. If you paid 7% sales tax, tell the AH you want 107% of the hammer. Exactly what I've gotten from one of the major AH's many times.

[bnorth]

Originally Posted by Rhotchkiss

Ben, for a $30k(ish), you are not paying a seller’s premium. In fact, you should get a portion of the buyer’s premium. And you have no tax liability if you sell a card at a loss- you have no income, only partial recovery of basis which was after tax dollars and which is not taxable. So, your loss is likely your cost (including taxes and shipping), minus the hammer + whatever portion of the BP you may be able to negotiate.

Originally Posted by Snapolit1

1. No one in their right mind pays a seller's commission consigning a $25,000 card. If they do, frankly, they are uninformed.

2. There is no tax ramification of me buying a card for $30,000. Or a million dollars.

3. If I sell something for more than I bought it for, only then do I owe taxes. And then, by definition, I haven't lost money on the sale.

4. If I bought a nice vintage card for $30,000 and had to sell literally tomorrow, ok, maybe I sell it for $28,000 or $27,000 in the next auction, WORST case scenario.
That's no doubt where the runners up landed. And I've lost maybe 10%. Nowhere near 50%.

5. If you paid 7% sales tax, tell the AH you want 107% of the hammer. Exactly what I've gotten from one of the major AH's many times.

Thanks guys. I don't swim in the deep end of the pool so I didn't know. Maybe i should have read one of Bob's epic posts on taxes.

I do feel it is important to know about selling a card that is expensive to the buyer even if they don't plan on selling.

[Rhotchkiss]

Originally Posted by bnorth

Thanks guys. I don't swim in the deep end of the pool so I didn't know. Maybe i should have read one of Bob's epic posts on taxes.

I do feel it is important to know about selling a card that is expensive to the buyer even if they don't plan on selling.

Ben, just to be clear, the other post you quote is not entirely accurate. While there is no state or federal income tax consequence on a purchase, Most people must pay state sales tax when they buy a card, which should be added to cost/basis for determining gain or loss.

I live in Maryland and the sales tax is 6%. I factor this into every bid I place. On a $30k card, the sales tax is $1800!! Ouch

Steve is 100% correct that Federal tax liability may accrue when you sell a card, but only if you sell for a gain.

[gonefishin]

I have had a "Sportscard Fund" separate from all my other income. It consists of money that is set aside to purchase items for my collection, items to resale, etc. It funds itself. At times the fund is full - other times not so much.

As long as you can afford it without adversely affecting monies you live on, and it's something you desire and covet, purchase the card. If you have doubts or concerns, my advice is not to.

NEVER, NEVER purchase cards that you can't afford to buy with cash! That's just me.

Good Luck with whatever you decide.

[rjackson44]

Never buy anything you can’t afford ,never ..you will regret it sooner then later ,,

[bbcard1]

I can live fine without. 1952 Topps Mantle, but I have a friend who is a huge fan and is working on a set. I started finding him nice ones when they were about $14k an he couldn't bring himself to pull the trigger. The man is a successful attorney and won not have really noticed it. He regrets it now.

[Jewish-collector]

Like I said to someone last month at the Net54 meetup in Dulles, "Sometimes you just gotta say WTF" and do it.

beer chug.gifbeer chug.gifbeer chug.gifbeer chug.gifbeer chug.gif

[Bicem]

That's a no brainer, will just keep appreciating. Nice grab.

[MantleMarisFordBerra]

Wow, very impressive! Congrats!

[Yoda]

Be bold on your purchase but make sure it is a mainstream card. Rarities often prove to be illiquid when selling.

[theshowandme]

Originally Posted by Yoda

Be bold on your purchase but make sure it is a mainstream card. Rarities often prove to be illiquid when selling.

Thanks

[Exhibitman]

That's a great one!

As for the OP, which I was late to read:

Vintage Baseball Cards I Have Regretted Not Buying When Affordable

These were right there for the taking, and I had the money, but I passed, and now I can't afford them or it would put a real financial hurt on me to get a decent one:

1925 Exhibit Gehrig
T206 Cobb green portrait
T206 Plank
Babe Ruth rookie
Zeenuts Joe DiMaggio
1957 Tip Top Spahn
1948 Leaf Robinson, Paige
1952 Topps Mantle
1957 Topps Bill Russell
1965 Topps Joe Namath
1933 Goudey Ruths
1934 Goudey portrait Gehrig
1939 Play Ball Williams
1949 Bowman Paige, Robinson, Snider, Campanella, Doby
1952 Topps Mays, Robinson, Mathews

Vintage Baseball Cards I Have Regretted Buying:

---0---

[brass_rat]

Congrats on a great pickup, Don!

When I read the initial post, I knew you were already considering a really important aspect:

>>> "It doesn’t impact my ability to pay for any current or future bills."

Now that you have the card in hand, I'm sure you're happy to have it as a collection cornerstone.

Cheers,
Steve

[kmac32]

It’s all relative. I have some low grade E121-120 Ruth cards that I bought maybe 15 years ago for $500 and cards in the same condition are listed at $8000 to $10000 now on eBay. No way would I have ever thought these cards would be worth that kind of money. If it is something more mainstream like the Ruth cards, it will probably go up in value so consider it an investment.