Cost basis - Warning tax related topic

steve B · #1 04-11-2023, 12:42 PM

Quote:

Originally Posted by Stupe the Second Sacker

It doesn't take a lot of intelligence to collect baseball cards and that fact really shines through in some of the responses. Learn to read Steve.

I did, a long time ago. I even understand what I read...

ALR-bishop · #2 04-11-2023, 01:28 PM

Had never considered the relationship between intelligence and baseball card collecting. Maybe a good separate topic

toppcat · #3 04-11-2023, 03:56 PM

Quote:

Originally Posted by ALR-bishop

Had never considered the relationship between intelligence and baseball card collecting. Maybe a good separate topic

Turds and punchbowls might be a better topic.

ALR-bishop · #4 04-11-2023, 05:45 PM

Had never considered that either Dave.

SAllen2556 · #5 04-12-2023, 08:38 AM

This thread is the reason I married an accountant instead of becoming one.

I do wonder, though, about card shows. They're largely all cash transactions and no receipts are ever given. In fact, if you want to have fun, ask a stodgy old card dealer for a receipt next time you buy at a card show. Every dealer at every card show is a tax cheat, right? They're not issuing receipts, and most aren't even keeping track of sales.

For the cost of a $40 table you can liquidate your cards with absolutely no paper trail. And in metro Detroit, the number of card shows per month has quadrupled, at least, over the last few years. I know for a fact that more than one dealer at the last show I attended gave up selling on eBay and now just travel from show to show on weekends instead. No records. No paper trail. All cash.

This statement from Bob C. typifies the stupidity and overreach of the tax laws:
"...I've explained to people how when they just trade cards, that is still technically deemed a sales transaction by the IRS, and is supposed to be reported as a taxable sale by both parties to the trade on their tax returns."

No offense to Bob C., he's obviously very good at what he does and quite bright, but if you need a CPA to sell baseball cards, there's something wrong with the system. And people will always find ways around paying higher taxes. It's the American way.

Stupe the Second Sacker · #6 04-12-2023, 09:00 AM

Quote:

Originally Posted by SAllen2556

This thread is the reason I married an accountant instead of becoming one.

I do wonder, though, about card shows. They're largely all cash transactions and no receipts are ever given. In fact, if you want to have fun, ask a stodgy old card dealer for a receipt next time you buy at a card show. Every dealer at every card show is a tax cheat, right? They're not issuing receipts, and most aren't even keeping track of sales.

For the cost of a $40 table you can liquidate your cards with absolutely no paper trail. And in metro Detroit, the number of card shows per month has quadrupled, at least, over the last few years. I know for a fact that more than one dealer at the last show I attended gave up selling on eBay and now just travel from show to show on weekends instead. No records. No paper trail. All cash.

This statement from Bob C. typifies the stupidity and overreach of the tax laws:
"...I've explained to people how when they just trade cards, that is still technically deemed a sales transaction by the IRS, and is supposed to be reported as a taxable sale by both parties to the trade on their tax returns."

No offense to Bob C., he's obviously very good at what he does and quite bright, but if you need a CPA to sell baseball cards, there's something wrong with the system. And people will always find ways around paying higher taxes. It's the American way.

Scotts gets it. Hope others here are paying attention.

obcbobd · #7 04-12-2023, 09:11 AM

Quote:

Originally Posted by SAllen2556

This thread is the reason I married an accountant instead of becoming one.

I do wonder, though, about card shows. They're largely all cash transactions and no receipts are ever given. In fact, if you want to have fun, ask a stodgy old card dealer for a receipt next time you buy at a card show. Every dealer at every card show is a tax cheat, right? They're not issuing receipts, and most aren't even keeping track of sales.

In the early 1990s I worked for the Massachusetts Department of Revenue. I also went to the occasional card show. I noticed that with the exception of Hall's Nostalgia, who had a physical store, no one charged state sales tax. I thought of asking one of my managers why they didn't crack down on this, of course I never did. Thirty years later I still never see anyone charging sales tax at shows.

raulus · #8 04-12-2023, 10:31 AM

Quote:

Originally Posted by obcbobd

In the early 1990s I worked for the Massachusetts Department of Revenue. I also went to the occasional card show. I noticed that with the exception of Hall's Nostalgia, who had a physical store, no one charged state sales tax. I thought of asking one of my managers why they didn't crack down on this, of course I never did. Thirty years later I still never see anyone charging sales tax at shows.

Sounds like a fun job at the DOR.

My experience is that collecting sales tax is only required if the business is registered to collect sales tax in that state. Registration requirements vary from state to state, but often revolve around issues like nexus and sales volume in that state.

Every once in a while, I'll get an email from an auction house announcing that they are now required to collect sales tax in a specific state, which adds to their existing list. I suspect this happens when they cross the sales threshold for that state.

So for a vendor who doesn't do much business in the state, often they won't be required to actually collect sales tax in that state. While there may be some gamesmanship around cash sales going on, I wouldn't be surprised if most of the dealers from out of state fall below the threshold necessary to register to collect sales tax in Mass.

jethrod3 · #9 04-12-2023, 11:24 AM

Quote:

Originally Posted by obcbobd

In the early 1990s I worked for the Massachusetts Department of Revenue. I also went to the occasional card show. I noticed that with the exception of Hall's Nostalgia, who had a physical store, no one charged state sales tax. I thought of asking one of my managers why they didn't crack down on this, of course I never did. Thirty years later I still never see anyone charging sales tax at shows.

So several years ago, when I had started doing one or two local small shows, I was under the impression (for whatever reason, right or wrong) that setting up at an occasional card show was pretty much the equivalent of setting up a garage sale: I was selling essentially second-hand stuff, not with the idea of making a huge profit (or often any profit), and I believe I'd read some tax rules about there being some number of times you could set up for a garage sale and NOT have to declare the financials unless you exceeded that number.

Even if I were to do a show again tomorrow, my intention would be to not sell off my few high-dollar collectibles for a profit now; it would be to reduce clutter from my collection and attempt to break even on stuff I either no longer want (much like one does at a garage sale) or that was thrown in with other items in auction lots that I actually wanted.

This of course begs the question: If someone, for the sake of discussion, is not a collector now, but has 5 sets of 1988 Topps baseball that they sell at a garage sale for $15 each because at time of purchase they thought it could be a great investment (but now is hardly worth the paper the cards are printed on), are those sets deemed collectibles and thus subject to reporting to the IRS? From what I've read, if the seller makes any profit, I think the answer unfortunately would be yes! But unless there are stricter rules for garage sales, unless I'm missing something, the tax law would be quite unenforceable.

edhans · #10 04-12-2023, 12:26 PM

Quote:

Originally Posted by SAllen2556

In fact, if you want to have fun, ask a stodgy old card dealer for a receipt next time you buy at a card show. Every dealer at every card show is a tax cheat, right? They're not issuing receipts, and most aren't even keeping track of sales.
.

Scott,
I am one of those stodgy old dealers and I will happily write you out a receipt when you purchase cards from me. Contrary to your assumption, I track my sales and purchases, report them on schedule C and pay self employment tax on my earnings. Many (probably most dealers) do the same. Your blanket accusation is, quite frankly, offensive.

Exhibitman · #11 04-12-2023, 03:08 PM

Quote:

Originally Posted by edhans

Scott,
I am one of those stodgy old dealers and I will happily write you out a receipt when you purchase cards from me. Contrary to your assumption, I track my sales and purchases, report them on schedule C and pay self employment tax on my earnings. Many (probably most dealers) do the same. Your blanket accusation is, quite frankly, offensive.

Old, definitely.

Be nice to catch up with you in Chicago this summer, Ed.

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