The trend in Wagner cards

[Exhibitman]

I'm tempted to sell some of my cards too, Peter, but when I factor in the cost of sale and the taxes that temptation fades away. Between 10%-20% of market to the auctioneer, 28% of the profit (and a sale of a highly appreciated asset would be nearly all profit) to the IRS if a capital gain or my marginal Federal tax rate if via a business, and my marginal tax rate to the state, a $50K profit becomes a $25K-$30K profit. Nice, but annoying. Hold until after I retire, and the picture changes. Hold until I die and my kid gets a stepped-up to FMV basis and she can sell it and pay nothing in taxes.

If I want to buy one again, the picture is even worse. I need a 50% drop in value to get back in at no extra cost. How often has that been the case over the last 40 years? Now, i guess I could invest the profit but making up a 50% hit like that is a very ambitious plan.

[Peter_Spaeth]

Originally Posted by Exhibitman

I'm tempted to sell some of my cards too, Peter, but when I factor in the cost of sale and the taxes that temptation fades away. Between 10%-20% of market to the auctioneer, 28% of the profit (and a sale of a highly appreciated asset would be nearly all profit) to the IRS if a capital gain or my marginal Federal tax rate if via a business, and my marginal tax rate to the state, a $50K profit becomes a $25K-$30K profit. Nice, but annoying. Hold until after I retire, and the picture changes. Hold until I die and my kid gets a stepped-up to FMV basis and she can sell it and pay nothing in taxes.

If I want to buy one again, the picture is even worse. I need a 50% drop in value to get back in at no extra cost. How often has that been the case over the last 40 years? Now, i guess I could invest the profit but making up a 50% hit like that is a very ambitious plan.

Taxes suck no question. But your reasoning leads to a Yogi-like result, does it not? I can't afford to sell that card, it's gone up too much in value.

[packs]

Not the Horner portrait but still one of my favorite images of Wags. I paid $1,000 for this once upon a time:

[scooter729]

Great spreadsheet!

It's missing the SGC pop on the E105 Mello-Mints - there are 13 batting pose and 1 throwing currently listed in their pop report.

[Touch'EmAll]

The Colgan's Chip Honus Wagner has the T206 image. And is relatively scarce in nice grade, PSA pop only about 20 in PSA 5 or higher, so you seem them offered less frequently than you might think. This Colgan's has often been referred to as a much less expensive alternative with the famous image. How has recent sales pricing been for this issue - big upswing or ?

[raulus]

Originally Posted by Peter_Spaeth

Taxes suck no question. But your reasoning leads to a Yogi-like result, does it not? I can't afford to sell that card, it's gone up too much in value.

No doubt about it!

I think the challenge with the knock-on effects when you give up ~40% of the proceeds to taxes (not to mention the selling costs also taking a piece) is that if you’re going to sell for the cash, it’s because you really want to get out of a piece, with really no plans to realistically get back into it, barring a complete collapse in prices.

[Exhibitman]

Originally Posted by Peter_Spaeth

Taxes suck no question. But your reasoning leads to a Yogi-like result, does it not? I can't afford to sell that card, it's gone up too much in value.

That's pretty good. Taxes on profits are the sort of problem you want to have.

[Aaron Seefeldt]

I have 0 Wagner cards, sold them all before the “explosion”. BUT I do have these labels and to me they’re the most beautiful Wagner portraits in the hobby

[robw1959]

Originally Posted by Aaron Seefeldt

I have 0 Wagner cards, sold them all before the “explosion”. BUT I do have these labels and to me they’re the most beautiful Wagner portraits in the hobby

Those cigar labels are so beautiful! I wonder how they got away with printing those when American Tobacco got sued to stop their T206 production?

[Aaron Seefeldt]

Originally Posted by robw1959

Those cigar labels are so beautiful! I wonder how they got away with printing those when American Tobacco got sued to stop their T206 production?

Thanks Rob! Not much is known about them but they were obviously stopped before mass production and distribution. They are all believed to be proofs. The largest one (rectangle/white/SGC Auth) has notes written on it. There is also an envelope or two known so it was obviously a legitimate business venture that was stopped for some reason(s). Did Wagner intervene?

The envelope isn’t mine, I sold it several years ago. Oddly, it has a stamp on it but was never postmarked

[Touch'EmAll]

Amazing stuff, guys !

[ahmanfan]

Originally Posted by Peter_Spaeth

Taxes suck no question. But your reasoning leads to a Yogi-like result, does it not? I can't afford to sell that card, it's gone up too much in value.

Unless you have a very clear and compelling path for the funds, I’m not flipping a baseball card, losing 40%, and putting it in another baseball card. Just not worth it.


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[Peter_Spaeth]

Originally Posted by ahmanfan

Unless you have a very clear and compelling path for the funds, I’m not flipping a baseball card, losing 40%, and putting it in another baseball card. Just not worth it.


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Losing 40 percent? Flipping? Not sure where you're coming up with that. I've owned mine for many years and bought it at a tiny fraction of what it would realize even after fees and taxes. Not that I am doing it...

[ahmanfan]

Originally Posted by Peter_Spaeth

Losing 40 percent? Flipping? Not sure where you're coming up with that. I've owned mine for many years and bought it at a tiny fraction of what it would realize even after fees and taxes. Not that I am doing it...

Well, since your cost basis is so low, so you sell a Wagner for 50 you’re only going to net 30 to buy a 30 K Ruth, or mantle, etc. That’s the trade I would be unwilling to make personally. Your purchasing power reduces if you make a move..


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[Peter_Spaeth]

Originally Posted by ahmanfan

Well, since your cost basis is so low, so you sell a Wagner for 50 you’re only going to net 30 to buy a 30 K Ruth, or mantle, etc. That’s the trade I would be unwilling to make personally. Your purchasing power reduces if you make a move..


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By that logic one could never sell a card that has significantly appreciated, because there are always going to be taxes and probably transaction costs that take part of the nominal value. If I keep the Wagner, how does that confer purchasing power on me? We are right back to Yogi.

[brunswickreeves]

Thanks for the additional cards noted. I’ll add them to the in-progress list and update the data. Happy to contribute a consolidated view for ease of reference and use/action by our hobby.

[aelefson]

I too am amazed at the price for some of the portrait cards. Here is a much cheaper version (I think I paid 10.00 or less) that I like much better than almost all of Wagner's baseball cards. It is a page from a 1910 Baseball Magazine issue. I also included my two other Wagner items, a Baseball Magazine premium from 1914 and a weird postcard (picture of a picture?).

Alan

[LincolnVT]

The Wagner “trend” might be just that…people looking to ride a short wave. He was a great player and I consider him one of the best hitters in the early days of the game. As some have said, many of his cards are rare. The portrait pose is pretty, but to me there will always only be one Wagner…the T206. Too many other great players (with actual household names) for him to take up more spending space.

[Touch'EmAll]

An original Honus Wagner photo, which was used to create the T206 card, just sold at auction for $ 117,500. - It sold 5 years ago for $ 65.k. Wagner stuff seemingly still doing quite well.

[cgjackson222]

Originally Posted by Touch'EmAll

An original Honus Wagner photo, which was used to create the T206 card, just sold at auction for $ 117,500. - It sold 5 years ago for $ 65.k. Wagner stuff seemingly still doing quite well.

While that is a decent profit, I don't know if a sale of just over $100K for a picture of its importance is all that impressive. The auction house had estimated $100K to $300K.

[Schlesinj]

Originally Posted by Touch'EmAll

An original Honus Wagner photo, which was used to create the T206 card, just sold at auction for $ 117,500. - It sold 5 years ago for $ 65.k. Wagner stuff seemingly still doing quite well.

Can someone put a link?

[parkplace33]

Originally Posted by Exhibitman

I'm tempted to sell some of my cards too, Peter, but when I factor in the cost of sale and the taxes that temptation fades away. Between 10%-20% of market to the auctioneer, 28% of the profit (and a sale of a highly appreciated asset would be nearly all profit) to the IRS if a capital gain or my marginal Federal tax rate if via a business, and my marginal tax rate to the state, a $50K profit becomes a $25K-$30K profit. Nice, but annoying. Hold until after I retire, and the picture changes. Hold until I die and my kid gets a stepped-up to FMV basis and she can sell it and pay nothing in taxes.

If I want to buy one again, the picture is even worse. I need a 50% drop in value to get back in at no extra cost. How often has that been the case over the last 40 years? Now, i guess I could invest the profit but making up a 50% hit like that is a very ambitious plan.

Can you or others explain the FMV basis? Or direct me to a website?

I though the act of inheriting someone was tax free, but if you sell it down the road, you would have to pay taxes on that sale?

[ullmandds]

Originally Posted by parkplace33

Can you or others explain the FMV basis? Or direct me to a website?

I though the act of inheriting someone was tax free, but if you sell it down the road, you would have to pay taxes on that sale?

when inheritance changes hands...the recipient is assessed the value of the inheritance on that transfer date as the value so if they sell that day they will pay no taxes.

[parkplace33]

Originally Posted by ullmandds

when inheritance changes hands...the recipient is assessed the value of the inheritance on that transfer date as the value so if they sell that day they will pay no taxes.

What about 6 months from that date?

[ullmandds]

Originally Posted by parkplace33

What about 6 months from that date?

if sale price is greater than value on date of transfer...that is the amount you pay taxes on.

[raulus]

Originally Posted by ullmandds

when inheritance changes hands...the recipient is assessed the value of the inheritance on that transfer date as the value so if they sell that day they will pay no taxes.

Maybe said another way, the person (or persons) who inherit the assets will step up their basis to fair market value on the date they inherit. So if you bought it for $100, and then die when it's worth $1,000,000, your heirs will have a basis of $1,000,000.

So if they sell right away, in theory there should be no gain or loss, because the sales price should be equal to the fair market value ($1,000,000 in this case), which is their basis.

If they wait to sell, then any appreciation after that date would be taxed when they choose to sell. I suppose the recipient could also choose to pass it down again when they die, in which case it gets stepped up again, at least under current law.

A few years ago, there was a proposal to start to tax gains that hadn't been taxed in the last 90 years. But that proposal hasn't gone anywhere so far, so in theory the inheritance tax benefit process could continue for as long as your heirs continue to not need the money.

[ullmandds]

Much clearer!!!

[Prof]

Originally Posted by raulus

Maybe said another way, the person (or persons) who inherit the assets will step up their basis to fair market value on the date they inherit. So if you bought it for $100, and then die when it's worth $1,000,000, your heirs will have a basis of $1,000,000.

So if they sell right away, in theory there should be no gain or loss, because the sales price should be equal to the fair market value ($1,000,000 in this case), which is their basis.

If they wait to sell, then any appreciation after that date would be taxed when they choose to sell. I suppose the recipient could also choose to pass it down again when they die, in which case it gets stepped up again, at least under current law.

A few years ago, there was a proposal to start to tax gains that hadn't been taxed in the last 90 years. But that proposal hasn't gone anywhere so far, so in theory the inheritance tax benefit process could continue for as long as your heirs continue to not need the money.

Hypothetically, do you know what the process would be like here?

- A person dies, and an old photo album gets distributed to a relative. Basically, "Hey, we're cleaning out the house. You want this?"
- Nobody searches through it for 10 years.
- Finally, they look through it, and find a T206 Doyle error card glued to a page.
- They consign and sell the card for 1 million.

Is there like a retroactive appraisal assessment for when the person received the album 10 years ago? Then, you subtract that 10-year-old value from the 1 million, and that's what you pay the gains on?

Or are you just paying on the 1 million since it was never appraised at the time?

-

And what about if the item was truly unique to the hobby with no past market value?

If there was a retroactive appraisal, would they just pull an educated estimate out of their butts that was smaller than the present day value from selling it?


(Sorry if this is derailing the thread a bit.)



Back on topic, Wagners are cool. I wish I had one.

[Casey2296]

Originally Posted by Prof

Hypothetically, do you know what the process would be like here?

- A person dies, and an old photo album gets distributed to a relative. Basically, "Hey, we're cleaning out the house. You want this?"
- Nobody searches through it for 10 years.
- Finally, they look through it, and find a T206 Doyle error card glued to a page.
- They consign and sell the card for 1 million.

Is there like a retroactive appraisal assessment for when the person received the album 10 years ago? Then, you subtract that 10-year-old value from the 1 million, and that's what you pay the gains on?

Or are you just paying on the 1 million since it was never appraised at the time?

-

And what about if the item was truly unique to the hobby with no past market value?

If there was a retroactive appraisal, would they just pull an educated estimate out of their butts that was smaller than the present day value from selling it?


(Sorry if this is derailing the thread a bit.)



Back on topic, Wagners are cool. I wish I had one.

"Is there like a retroactive appraisal assessment for when the person received the album 10 years ago? Then, you subtract that 10-year-old value from the 1 million, and that's what you pay the gains on?"

I believe this is correct, although I'm not a trust/estate attorney I did stay at a Holiday in Express last night...

[Peter_Spaeth]

Originally Posted by Casey2296

"Is there like a retroactive appraisal assessment for when the person received the album 10 years ago? Then, you subtract that 10-year-old value from the 1 million, and that's what you pay the gains on?"

I believe this is correct, although I'm not a trust/estate attorney I did stay at a Holiday in Express last night...

Right, the question is the step up basis at time of transfer, and where there is no contemporaneous appraisal or documentation, one would need to do a good faith estimate based on whatever information is reasonably available.

[raulus]

Originally Posted by Prof

Hypothetically, do you know what the process would be like here?

- A person dies, and an old photo album gets distributed to a relative. Basically, "Hey, we're cleaning out the house. You want this?"
- Nobody searches through it for 10 years.
- Finally, they look through it, and find a T206 Doyle error card glued to a page.
- They consign and sell the card for 1 million.

Is there like a retroactive appraisal assessment for when the person received the album 10 years ago? Then, you subtract that 10-year-old value from the 1 million, and that's what you pay the gains on?

Or are you just paying on the 1 million since it was never appraised at the time?

-

And what about if the item was truly unique to the hobby with no past market value?

If there was a retroactive appraisal, would they just pull an educated estimate out of their butts that was smaller than the present day value from selling it?


(Sorry if this is derailing the thread a bit.)



Back on topic, Wagners are cool. I wish I had one.

If this is your situation, it’s time to hire a CPA who does this stuff every day. Most of these exciting fact patterns boil down to facts and circumstances and trying to document stuff. And even then, there’s going to be a lot of gray area, so it will come down to a question of how much you want to play in the gray area.