Selling a card you inherited - Income tax

[BobC]

Originally Posted by obcbobd

I don't follow your logic. $50K or cards or $50K of cash, how are they treated differently for tax purposes? If you sell the card ten years later for $60K, you have to declare the $10K profit. Same if you invest $50K in a fund and you sell those shares later for $60K, you have a profit of $10K

I guess it would be easier to sell the cards and not declare anything. Also a lot more work.

Bob,

I think what Johnny was really asking was more along the lines of if it is better to make a gift during one's lifetime, or wait and pass an item through to one's heirs at death.

Plus, what you are saying is not necessarily entirely correct as there can be a very huge difference between gifting or leaving your kids $50K of cards or $50K of cash. Did you ever consider the very distinct possibility that the person gifting/leaving the cards to his kids may have actually paid a much lower amount for them, and therefore their tax basis in them is way lower than $50K? Or in the case of some of these ridiculously priced ultra-modern cards it is even possible the tax basis could be much higher, and the card values have since dropped down to just $50K. Either way, that differing tax basis in the owner's hands can have a significant effect on what may be the best course of action for the cards' owner to transfer these cards, or at least their value, to his kids. In my next post I'll respond to Johnny's original question and explain further and in more detail.