Quote:
Originally Posted by Rhotchkiss
I do not use a vault. But I do think the vault concept is a great idea. Not only does it legally avoid state tax (if the vault is in a tax exempt state and the card is held there long enough), but it’s an apparently very safe place to store valuable assets. Would people question someone who had their cards sent to a Bank of America safety deposit box located in Delaware (or Oregon)? This is very similar to that, except it’s PWCC/Goldin/EBay, etc instead of Bank of America.
If you trust the vault owner (and that’s a legit “if”), and you don’t care about seeing and touching your cards on a regular basis… than why not? This especially true if you are buying expensive cards and savings tens of thousands on taxes. And you don’t have to worry about theft, fire, flood, etc., can use these cards as collateral for loans, have a third party inventory and track your cards, and you can resell them right there without having to deal with mail.
Meanwhile, you are going to see genetic vaults pop up all over. Banks are closing brick and mortar locations, and with them, the safety deposits contained therein. There will be a shift to private vaults (or safety deposit spaces). It’s no different than self storage for expensive/important stuff. The vault is for cards specifically, but it’s coming on a more general, mainstream level
Regarding state taxes- it is not avoidance if the card is sent and remains in the tax exempt state for a meaningful duration. I am not sure what that is, but 2 years is most definitely sufficient. It’s also sufficient if it’s sent there and leaves within months bc it’s sold to another. There are real and substantial business reasons for sending your cards to a vault, especially if they are assets, that have nothing to do with tax avoidance - safe protection, storage, serve as collateral for a loan, third party inventory/tracking/reporting (they make your collection “spreadsheets”), ease of resale, etc.
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The comp with BAM is a bit ridiculous. Banks are VERY highly regulated, and failure rates are absurdly low.
PWCC may own a vault that has similar features to a bank vault but that's where the similarity ends. The risk in keeping cards in one of these vaults isn't that someone will break in, or there will be a fire. That is marketing and appears it is working. Loss due to theft or fire is covered by insurance.
The real risk is that the business fails, a bankruptcy follows, and your cards are being held / secured by another party. Which has happened in other vault type business, wine for instance. Add in that folks are borrowing against those cards and in the case of a business failure, someone else will have dibs on your stuff.
I know business failure is hard to fathom after the crazy 10 year bull run but large companies fail on the regular, none of us have any idea what PWCC's financials look like.