02-09-2022, 04:33 PM
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Eric Perry
Member
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Join Date: Oct 2012
Location: Philadelphia Suburbs
Posts: 4,015
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Quote:
Originally Posted by Smarti5051
...Hypothetically (truly hypothetical because this specific card will be in my collection until death), if I saw a beautiful "better" Ruth for $100,000 that I wanted to replace it with, I would sell my PSA 5 for let's just say $50,000. Then, I could use the proceeds to buy the $100,000 version. Well, in that scenario, I sell for $50,000 and immediately have a taxable gain of at least $48,000 (assuming my accountant feels comfortable we could defend the cost basis without any documentation). Even at 28% federal + 11% state income tax, that is close to $20,000 in tax liability from one sale. That means, I "net" $30,000 and pull $70,000 out of my savings to acquire the Ruth. By contrast, if (as I inquired) it was somewhat commonplace to offer a combination of downgrade + cash to improve the same PC card, I would have the new card in collection and $20,000 more in the bank...
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If I'm not mistaken, the trade would also qualify as a taxable event.
(paging BobC)
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Eric Perry
Currently collecting:
T206 (136/524)
1956 Topps Baseball (198/342)
"You can observe a lot by just watching."
- Yogi Berra
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