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

[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?

[egbeachley]

Originally Posted by 4815162342

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?

In the example given, if you buy something for 25 cents, find out it's worth $10,000 and donate it, you have in essence 2 separate transactions; income of $10,000 and then a donation of $10,000. You don't get to pick the $10,000 donation and conveniently ignore the income piece.

[canjond]

Originally Posted by egbeachley

In the example given, if you buy something for 25 cents, find out it's worth $10,000 and donate it, you have in essence 2 separate transactions; income of $10,000 and then a donation of $10,000. You don't get to pick the $10,000 donation and conveniently ignore the income piece.

I still don't follow how you have income earned if its a donation? If I donate something worth $10,000, how did I realize any income on that item? I gave it away for free, regardless of the value. I, as well as probably countless others, donate clothing to the Salvation Army every year. I don't have to declare the FMV of my clothing donation as income.

[egbeachley]

Originally Posted by canjond

I still don't follow how you have income earned if its a donation? If I donate something worth $10,000, ho did I realize any income on that item. I gave it away for free, regardless of the value. I, as well as probably countless others, donate clothing to the Salvation Army every year. I don't have to declare the FMV of my clothing donation as income.

Because every time you donate clothes or cars it's assumed that you purchased it for more than the donated value.

[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.

[peterose4hof]

I know this post has gone in a different (and interesting) direction, but I have a comment that pertains to the original poster's point.

You can make money buying and selling collections like these. I used to make a solid 2nd income doing so. Fortunately I am on to bigger and better things. Here are a few rules to live by:

#1 Count only the things that you are confident you can sell right away ie: complete sets, wax boxes and high-dollar singles. Add up what you can sell this stuff for and divide it by 2. That is the most you should pay for the entire collection. If you are selling on ebay then you should factor in fees as well. I usually figure 20% of the gross sales are going to pay fees, so take that off first and then divide it in half.

#2 Once you sell off the items in step #1 you are stuck with the rest of the "junk". This is the part that most people don't like to hassle with. You can normally find someone in your area who buys bulk and unload them cheap. If you don't know of such a person put the collection on Craigslist and they will come out of the woodwork. They will lowball you, but that's fine you just want them gone. You can also find creative ways to sell them off such as team lots, player lots, mystery lots/grab bags etc. This tends to be more work than it is worth though.

#3 If you can add something to your personal collection along the way that is a nice bonus

#4 (And most important) DO NOT OVERPAY! Yes it is exciting to aquire a large hoard of cards and sort through them and find all the gems. For the most part though what you see is what you get. If the dealer/seller wants too much for their stuff it's just not worth it for you.

Best of Luck!

[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.