Has Anyone Ever Acquired an Entire Inventory from a Baseball Card Store/Stand?

[canjond]

I'm certainly not a tax expert (I pay my CPA to be), but couldn't there be some value in a cheap purchase and donation for write-off purposes? I.e., collection has FMV of $10k, although difficult and time consuming to move. The collection is purchased for $100 and then donated to a series of thift store, charity auctions, fund raisers, etc?

[egbeachley]

Originally Posted by canjond

I'm certainly not a tax expert (I pay my CPA to be), but couldn't there be some value in a cheap purchase and donation for write-off purposes? I.e., collection has FMV of $10k, although difficult and time consuming to move. The collection is purchased for $100 and then donated to a series of thift store, charity auctions, fund raisers, etc?

If the collection is purchased for $100, then it has a FMV of $100. You just spent $100 to save $30 on your taxes.

[canjond]

Originally Posted by egbeachley

If the collection is purchased for $100, then it has a FMV of $100. You just spent $100 to save $30 on your taxes.

Again, I may be wrong but I didn't think determining FMV for taxing purposes is so cut and dry. For example, if I walk into a flea market and purchase a 52 Topps Mantle for 25 cents, and subsequently decide to donate it to charity, am I only able to write 25 cents off my taxes, or am I able to write off the FMV (a price someone is willing to pay for the item) - let's say $10k? In other words, I didn't think FMV had to take into consideration a "bargain" purchase price.

Oh well either way.

[BillyCoxDodgers3B]

Originally Posted by canjond

Again, I may be wrong but I didn't think determining FMV for taxing purposes is so cut and dry. For example, if I walk into a flea market and purchase a 52 Topps Mantle for 25 cents, and subsequently decide to donate it to charity, am I only able to write 25 cents off my taxes, or am I able to write off the FMV (a price someone is willing to pay for the item) - let's say $10k? In other words, I didn't think FMV had to take into consideration a "bargain" purchase price.

Oh well either way.

I'm fairly certain you are able to write off such an item at current FMV. I have donated a car to charity in the past. The charity employs an impartial assessor to ascertain FMV and then mails you a tax-deductible receipt for the FMV amount according to the assessor's findings. Perhaps the answer lies within finding the opinion of a recognized/approved appraiser.

[baseballart]

Originally Posted by JBirkholm

I'm fairly certain you are able to write off such an item at current FMV. I have donated a car to charity in the past. The charity employs an impartial assessor to ascertain FMV and then mails you a tax-deductible receipt for the FMV amount according to the assessor's findings. Perhaps the answer lies within finding the opinion of a recognized/approved appraiser.

Jodi

In Canada, there are a number of rules that deal with donations, including a three year rule look-back rule restricting donations to the purchaser's cost, rather than fair market value. These amendments were put into place to prevent what the fisc considered inappropriate donation schemes whereby a taxpayer profited through a donation after taking into account the tax credit. Donations aren't always a simple thing when the donation isn't cash.

Max

[crazysc]

Originally Posted by JBirkholm

I'm fairly certain you are able to write off such an item at current FMV. I have donated a car to charity in the past. The charity employs an impartial assessor to ascertain FMV and then mails you a tax-deductible receipt for the FMV amount according to the assessor's findings. Perhaps the answer lies within finding the opinion of a recognized/approved appraiser.

Legally, you're not supposed to make a "profit" off of charitable donations. Realistically, I don't think you're going to get a huge argument if you're not being a pig about it.

Being in the auto business, I occasionally donate or facilitate donations of worn out cars. Getting a $500 tax donation for a car that sells for $200-300 when it's auctioned is not going to raise eyebrows - and most people have basis in the vehicle anyhow. Buying an old junker for $500 to make a donation and charge off $5000 - that'll get you in some trouble. No different than cards I'm sure.

[egbeachley]

Originally Posted by canjond

Again, I may be wrong but I didn't think determining FMV for taxing purposes is so cut and dry. For example, if I walk into a flea market and purchase a 52 Topps Mantle for 25 cents, and subsequently decide to donate it to charity, am I only able to write 25 cents off my taxes, or am I able to write off the FMV (a price someone is willing to pay for the item) - let's say $10k? In other words, I didn't think FMV had to take into consideration a "bargain" purchase price.

That's easy. You get to deduct the full $10K. Right after you report the $10K income.

[Jim VB]

Originally Posted by egbeachley

That's easy. You get to deduct the full $10K. Right after you report the $10K income.

Really? Is the law different for collectibles than other assets? I know you can donate appreciated stocks without taking the income hit. I'm pretty sure you can do it with real estate. Would this be treated differently?

[egbeachley]

Originally Posted by Jim VB

Really? Is the law different for collectibles than other assets? I know you can donate appreciated stocks without taking the income hit. I'm pretty sure you can do it with real estate. Would this be treated differently?

Same thing really. The income earned and deduction made cancel each other out.

[4815162342]

Originally Posted by egbeachley

Same thing really. The income earned and deduction made cancel each other out.

I'm not following. If you were to sell these worthless cards and make a profit of $10,000 and then donate $10,000, I could see the income and donation canceling each other out. But how is buying something and then donating it the same thing?

[Jim VB]

Originally Posted by egbeachley

Same thing really. The income earned and deduction made cancel each other out.

Using the donation of appreciated stock as an example, it's NOT the same thing. When I donate stock to a charity, I get a deduction at the current price and never have to pay capital gains on the appreciation.

[uffda51]

A couple of friends of mine owned a card store in the early 80s. They had a chance to buy 500,000 1980's Topps commons for $500. The figured they couldn't lose.

They did.

[baseballart]

Originally Posted by canjond

I'm certainly not a tax expert (I pay my CPA to be), but couldn't there be some value in a cheap purchase and donation for write-off purposes? I.e., collection has FMV of $10k, although difficult and time consuming to move. The collection is purchased for $100 and then donated to a series of thift store, charity auctions, fund raisers, etc?

Jon

I can't say what the IRS would do with this, but in Canada, there have been numerous packaged donations that promoters have sold in this manner. They have been universally attacked and attacked successfully by the Canada Revenue Agency.

Max

[insidethewrapper]

You can usually sell your commons in the .002 range ( 1/5 cent each). I don't know the current price. I sold 1 million commons for $ 2000 and kept all the stars and rookies etc. Companies repackage these and sell in department stores. Look thru SCD ads etc. for common buyers and then determine if you can make a profit. Sell 700 cards from a set for $ 1.40 and save the stars. You would have to buy very cheap to make a profit.

[Orioles1954]

We can end our search for alternative energy sources by burning the millions of 1980s-1990s comons out there.