PWCC vault...explain

[Republicaninmass]

It all depends when the margin call comes. What happens if values fall 50%?


What if the advance doesnt cover your future purchases. Also, what are the tax ramifications? Is this some sort of 1031 exchange for cards?

Just too many new variables heating up the already white hot market.

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[molenick]

I was going to mention values falling but I didn't want my post to be too long.

Yes, there is a risk that between the time of consignment and sale card values will fall so much that you will not be able to cover the advance. Also, I was not saying the advance would necessarily be used to cover other purchases...it could be used to cover the cost of a new hot water boiler.

I guess I am just saying that if you sell $6K worth of cards you actually have $6k cash as a result and that an advance just means you are are getting $2k now and $4k later.

There are of course other variables involved and in theory the prudent thing is to not get an advance and wait until the auction is complete and you have received your check before spending (or saving) the proceeds.

[BobC]

Originally Posted by Republicaninmass

It all depends when the margin call comes. What happens if values fall 50%?


What if the advance doesnt cover your future purchases. Also, what are the tax ramifications? Is this some sort of 1031 exchange for cards?

Just too many new variables heating up the already white hot market.

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There is emphatically NO possibility of a Section 1031 Like-Kind Exchange on baseball cards. Under current tax law the only type of asset that can ne subject to a Like-Kind Exchange is real estate......period!

[molenick]

To be clear, I was not talking about tax-related issues (of which I offer no advice since I am not an expert).

Just commenting on cash advances made against future sales versus loans made against property being held in a vault. Maybe there is no difference, I was just bringing it up for discussion.