Heritage Rosen Mantle - Greatest Card Ever Auctioned?

[BobC]

Originally Posted by Johnny630

Bob C I have a question for you, what would the consignor's tax burden be on the card ??

Paid $50,000 in 1991

Sale in 2022

Let’s say Heritage Gives him Zero commissions so he gets the hammer price minus the buyer's premium or maybe he gets a negative 5%.

It is a little hard to say since the card hasn't sold yet, and we don't know what the final price will be. Here's a ballpark formula you can use to figure approximately what the seller may owe.


(Net Amount Seller Actually Receives From Heritage - $50,000) X 20% = Approximate Federal Income Tax Due


This assumes the seller is not a dealer, so the sale is treated as a Long-Term Capital Gain (LTCG) by the seller since he held the card for more than a year. And for federal income tax purposes, the maximum tax rate on a LTCG is currently at 20%. So if after the card sells, and Heritage deducts all it's commissions fees and so on, say they end up sending the seller a check for $10,000,000.


($10,000,000 - $50,000) X 20% = $1,990,000


Now remember, this is only for the supposed U.S. federal income tax on the sale. We don't even know if the seller is actually a U.S. citizen, and therefore subject to U.S. income tax on this sale to begin with. And if the seller is a U.S. citizen, we still don't know what state/city they live in as there could be additional state/local income taxes on this sale as well.

And speaking of taxes, depending on where the buyer lives and is having the card delivered to, there's also the possibility the buyer can end up paying sales tax for this purchase as well, on top of the actual hammer price plus the buyer's commission. So the final cost to the buyer for this card could end up being even more than some people realize.

Here's something to think about in regards to that T206 Wagner card that Golding just brokered a private sale of for $7.2M. How much would you like to bet the buyer in that private deal may have left that card in Goldin's hands, in their vault in Delaware? Delaware has no sales tax so leaving that card with Goldin could save the buyer a lot of money. The sales tax where I live is 8%, so in that case, if I had bought that card for $7.2M and then left it with Goldin, I would have saved $576,000 in sales tax. In the case of this Rosen Mantle card, if it does go for sale over $10M, the sales tax savings by having it sent to a vault where there are no state sales taxes could easily result in a saving of $800K or more to the buyer, depending on the buyer's home state and final selling price. And this is exactly why those companies that have set up vaults did so, to help attract sales and deals like this that they can score huge commissions on.

And depending on the state the buyer lives in, there could also be other, non-income taxes due as well by the seller/auction house. For example, Ohio has something known as the Commercial Activity Tax (CAT tax), which calls for all sellers to pay a tax of 2 mills (0.26%) on all gross sales made to buyers/consumers in the state of Ohio. So if the Rosen Mantle was sold to someone in Ohio for say $10M, knock off the first $1M and figure the CAT tax due Ohio as approximately $9,000,000 X 0.0026 = $23,400. And if Heritage already had reached $1M in gross sales to Ohioans and Ohio businesses for the calendar year, the CAT tax due on that $10M sale would most likely be for the full $26,000. I would assume that Heritage in their contracts has such additional potential taxes and costs coming out of the seller/consignor's pocket, in which case the seller at least gets a little bit more of a deduct for federal income tax purposes.

[Johnny630]

Originally Posted by BobC

It is a little hard to say since the card hasn't sold yet, and we don't know what the final price will be. Here's a ballpark formula you can use to figure approximately what the seller may owe.


(Net Amount Seller Actually Receives From Heritage - $50,000) X 20% = Approximate Federal Income Tax Due


This assumes the seller is not a dealer, so the sale is treated as a Long-Term Capital Gain (LTCG) by the seller since he held the card for more than a year. And for federal income tax purposes, the maximum tax rate on a LTCG is currently at 20%. So if after the card sells, and Heritage deducts all it's commissions fees and so on, say they end up sending the seller a check for $10,000,000.


($10,000,000 - $50,000) X 20% = $1,990,000


Now, remember, this is only for the supposed U.S. federal income tax on the sale. We don't even know if the seller is actually a U.S. citizen, and therefore subject to U.S. income tax on this sale to begin with. And if the seller is a U.S. citizen, we still don't know what state/city they live in as there could be additional state/local income taxes on this sale as well.

And speaking of taxes, depending on where the buyer lives and is having the card delivered to, there's also the possibility the buyer can end up paying sales tax for this purchase as well, on top of the actual hammer price plus the buyer's commission. So the final cost to the buyer for this card could end up being even more than some people realize.

Here's something to think about in regards to that T206 Wagner card that Golding just brokered a private sale of for $7.2M. How much would you like to bet the buyer in that private deal may have left that card in Goldin's hands, in their vault in Delaware? Delaware has no sales tax so leaving that card with Goldin could save the buyer a lot of money. The sales tax where I live is 8%, so in that case, if I had bought that card for $7.2M and then left it with Goldin, I would have saved $576,000 in sales tax. In the case of this Rosen Mantle card, if it does go for sale over $10M, the sales tax savings by having it sent to a vault where there are no state sales taxes could easily result in a saving of $800K or more to the buyer, depending on the buyer's home state and final selling price. And this is exactly why those companies that have set up vaults did so, to help attract sales and deals like this that they can score huge commissions on.

And depending on the state the buyer lives in, there could also be other, non-income taxes due as well by the seller/auction house. For example, Ohio has something known as the Commercial Activity Tax (CAT tax), which calls for all sellers to pay a tax of 2 mills (0.26%) on all gross sales made to buyers/consumers in the state of Ohio. So if the Rosen Mantle was sold to someone in Ohio for say $10M, knock off the first $1M and figure the CAT tax due Ohio as approximately $9,000,000 X 0.0026 = $23,400. And if Heritage already had reached $1M in gross sales to Ohioans and Ohio businesses for the calendar year, the CAT tax due on that $10M sale would most likely be for the full $26,000. I would assume that Heritage in their contracts has such additional potential taxes and costs coming out of the seller/consignor's pocket, in which case the seller at least gets a little bit more of a deduct for federal income tax purposes.

Thanks, Bob !

With these vaults...say the buyer actually wants to have the card in his hand. Say down the road 10 years or so the buyer retires and moves to a sales tax-free state like Nevada can he then have it shipped to his new residence in Nevada without having to pay his original state's sales tax at the time of purchase ?


I often wonder what happens if one of the owners/corporations of these vaults gets indicated or files bankruptcy what happens to your cards then ?

[insidethewrapper]

Bob : Would it have been better to leave this 52 T Mantle card to his kids in his will and then they would get it at current market value when he died and they could have sold it and therefore eliminate most taxes ?

[BobC]

Originally Posted by insidethewrapper

Bob : Would it have been better to leave this 52 T Mantle card to his kids in his will and then they would get it at current market value when he died and they could have sold it and therefore eliminate most taxes ?

Short answer is......maybe.

Under current estate tax law, when a person passes, all of the items they leave to their heirs get what is called a stepped-up basis to the then current fair market value of the assets as of the day the person passes, or potentially at an alternative valuation date six months later. Initially on the surface, leaving the Mantle to his kids when he passes so they get a basis step-up and can then sell the card right away for virtually no gain would seem like a slam dunk way to save his kids the most taxes. But that only saves them the Long-Term Capital Gains (LTCG) tax on the sale of the card, which for federal income tax purposes is currently capped at 20%.

However, in doing so you are forgetting about the potential federal estate taxes that may be due on the card being left as part of the kid's inheritance. In return for getting the basis-step, it also means that same current fair market value the inherited assets are given is included as part of the deceased person's taxable estate. And current federal estate tax rates go as high as 40% once the taxable part of an estate reaches $1M, and higher. Every person has a lifetime estate and gift tax exemption that they get to offset against potential taxes due on gifts they make during their lifetime, or against the value of the estate they leave their heirs. This exemption amount under current law is at $12.06M, per person, for 2022. The vast majority of people in the U.S. don't leave estates worth that much, so they end up having no federal estate tax due, and their heirs get everything at a stepped-up basis so there is also virtually no tax due if they sell things right away after the person passed.

What we don't know is what else the person may have in their estate. If some, or even all, of that lifetime gift and estate tax exemption amount is used up by other thing's in the person's estate, or from gifts they had given away during their lifetime, that means some, or even all, of the then current fair market value of the Rosen Mantle card left to the deceased's children can be subject to the up to 40% federal estate tax rate. So in that case, the kids get a stepped-up basis and no 20% LTCG tax on selling the card, but the estate can get hit with a 40% estate tax on the card's fair market value. See the potential issue. And so you know, the current administration talked about reducing that lifetime estate and gift tax exemption amount down to around $3.5M to help fund the Build Back Better program, but it didn't go through. But still, unless something else is changed, the current estate/gift exemption amount is set to expire in 2025 as part of the tax law that passed when Trump was in office, and the lifetime exemption amount will likely go down by at least $5M-$6M. The adjustment is based on inflation, so the exact amount won't be known till 2025. In that case, knowing that lifetime exemption is scheduled to drop in 2025, unless the current owner expects to pass away before 2025, it may actually make more sense for him to gift the card to his kids before the exemption amount drops so that he at least takes advantage of passing on as much of his estate to the kids with no gift or estate tax as possible. Once that exemption amount drops, the potential tax savings from the lost exemption is gone. Plus, assuming the card will continue to increase in value over time, moving it on to his kids today can get all the future appreciation (and the potential resulting estate taxes) out of his estate. Yet he can still hold on to and enjoy the card since it is still in his family.

And I'm not even going to get into the additional implications of if he's married or not. For now, I really know nothing about the person selling the Rosen Mantle card, and would need to have virtually done an entire estate planning review and calculation before seriously trying, and being able to realistically answer, your question.

[clamendo]

Originally Posted by BobC

Short answer is......maybe.

Under current estate tax law, when a person passes, all of the items they leave to their heirs get what is called a stepped-up basis to the then current fair market value of the assets as of the day the person passes, or potentially at an alternative valuation date six months later. Initially on the surface, leaving the Mantle to his kids when he passes so they get a basis step-up and can then sell the card right away for virtually no gain would seem like a slam dunk way to save his kids the most taxes. But that only saves them the Long-Term Capital Gains (LTCG) tax on the sale of the card, which for federal income tax purposes is currently capped at 20%.

However, in doing so you are forgetting about the potential federal estate taxes that may be due on the card being left as part of the kid's inheritance. In return for getting the basis-step, it also means that same current fair market value the inherited assets are given is included as part of the deceased person's taxable estate. And current federal estate tax rates go as high as 40% once the taxable part of an estate reaches $1M, and higher. Every person has a lifetime estate and gift tax exemption that they get to offset against potential taxes due on gifts they make during their lifetime, or against the value of the estate they leave their heirs. This exemption amount under current law is at $12.06M, per person, for 2022. The vast majority of people in the U.S. don't leave estates worth that much, so they end up having no federal estate tax due, and their heirs get everything at a stepped-up basis so there is also virtually no tax due if they sell things right away after the person passed.

What we don't know is what else the person may have in their estate. If some, or even all, of that lifetime gift and estate tax exemption amount is used up by other thing's in the person's estate, or from gifts they had given away during their lifetime, that means some, or even all, of the then current fair market value of the Rosen Mantle card left to the deceased's children can be subject to the up to 40% federal estate tax rate. So in that case, the kids get a stepped-up basis and no 20% LTCG tax on selling the card, but the estate can get hit with a 40% estate tax on the card's fair market value. See the potential issue. And so you know, the current administration talked about reducing that lifetime estate and gift tax exemption amount down to around $3.5M to help fund the Build Back Better program, but it didn't go through. But still, unless something else is changed, the current estate/gift exemption amount is set to expire in 2025 as part of the tax law that passed when Trump was in office, and the lifetime exemption amount will likely go down by at least $5M-$6M. The adjustment is based on inflation, so the exact amount won't be known till 2025. In that case, knowing that lifetime exemption is scheduled to drop in 2025, unless the current owner expects to pass away before 2025, it may actually make more sense for him to gift the card to his kids before the exemption amount drops so that he at least takes advantage of passing on as much of his estate to the kids with no gift or estate tax as possible. Once that exemption amount drops, the potential tax savings from the lost exemption is gone. Plus, assuming the card will continue to increase in value over time, moving it on to his kids today can get all the future appreciation (and the potential resulting estate taxes) out of his estate. Yet he can still hold on to and enjoy the card since it is still in his family.

And I'm not even going to get into the additional implications of if he's married or not. For now, I really know nothing about the person selling the Rosen Mantle card, and would need to have virtually done an entire estate planning review and calculation before seriously trying, and being able to realistically answer, your question.

Someone else told me the same thing, but what about state taxes? I know it varies by state, but let’s say he lives in a wonderful democratically run state like NY or California?


Sent from my iPhone using Tapatalk

[Republicaninmass]

Cant wait for the PWCC "storage wars" style vault auction!

[BobC]

Originally Posted by clamendo

Someone else told me the same thing, but what about state taxes? I know it varies by state, but let’s say he lives in a wonderful democratically run state like NY or California?


Sent from my iPhone using Tapatalk

California currently has no estate or inheritance tax.

However, New York state does have an estate tax, but no inheritance tax. For 2022, the minimum threshold to be subject to New York's estate tax is $6.11M. As long as your taxable estate is worth less than this amount, there is no estate tax due New York. This exemption threshold amount is subject to change and goes up each year based on same inflation factor. However, New York also has a quirky twist to their estate tax law. As long as your estate value does not go up any higher than 105% of that estate tax exemption threshold, which for 2022 is $6,415,500 ($6.11M X 105%), you only pay New York estate tax on the value of the estate in excess of the 2022 exemption threshold amount of $6.11M.

But, go just $1 over the 105% amount of $6,415,500 to $6,415,501, and the entire value of the estate, including the previously exempt $6.11M, is now all subject to New York estate tax. And kind of like income taxes, New York estate taxes are calculated on a graduated tax rate schedule that starts at 3.06% on the first taxable dollars of the estate, and goes all the way up to 16.0% that starts once the taxable value of the estate goes over $10.1M. Here's New York state's current estate tax table for 2022 shown below.

So based on this, if someone passed away in 2022 and left the heirs a card valued for estate purposes at say $10M, and there was nothing else in the estate, that entire $10M would be subject to New York estate tax based on the table below, which would end up being $1,067,600 in estate tax due.


NEW YORK ESTATE TAX RATES
Taxable Estate* Base Taxes Paid Marginal Rate Rate Threshold**
$1 – $500,000 $0 3.06% $1
$500,000 – $1 million $15,300 5.0% $500,000
$1 million – $1.5 million $40,300 5.5% $1 million
$1.5 million – $2.1 million $67,800 6.5% $1.5 million
$2.1 million – $2.6 million $106,800 8.0% $2.1 million
$2.6 million – $3.1 million $146,800 8.8% $2.6 million
$3.1 million – $3.6 million $190,800 9.6% $3.1 million
$3.6 million – $4.1 million $238,800 10.4% $3.6 million
$4.1 million – $5.1 million $290,800 11.2% $4.1 million
$5.1 million – $6.1 million $402,800 12.0% $5.1 million
$6.1 million – $7.1 million $522,800 12.8% $6.1 million
$7.1 million – $8.1 million $650,800 13.6% $7.1 million
$8.1 million – $9.1 million $786,800 14.4% $8.1 million
$9.1 million – $10.1 million $930,800 15.2% $9.1 million
Over $10.1 million $1.082 million 16% $10.1 million

That help?

[clamendo]

Originally Posted by BobC

California currently has no estate or inheritance tax.

However, New York state does have an estate tax, but no inheritance tax. For 2022, the minimum threshold to be subject to New York's estate tax is $6.11M. As long as your taxable estate is worth less than this amount, there is no estate tax due New York. This exemption threshold amount is subject to change and goes up each year based on same inflation factor. However, New York also has a quirky twist to their estate tax law. As long as your estate value does not go up any higher than 105% of that estate tax exemption threshold, which for 2022 is $6,415,500 ($6.11M X 105%), you only pay New York estate tax on the value of the estate in excess of the 2022 exemption threshold amount of $6.11M.

But, go just $1 over the 105% amount of $6,415,500 to $6,415,501, and the entire value of the estate, including the previously exempt $6.11M, is now all subject to New York estate tax. And kind of like income taxes, New York estate taxes are calculated on a graduated tax rate schedule that starts at 3.06% on the first taxable dollars of the estate, and goes all the way up to 16.0% that starts once the taxable value of the estate goes over $10.1M. Here's New York state's current estate tax table for 2022 shown below.

So based on this, if someone passed away in 2022 and left the heirs a card valued for estate purposes at say $10M, and there was nothing else in the estate, that entire $10M would be subject to New York estate tax based on the table below, which would end up being $1,067,600 in estate tax due.


NEW YORK ESTATE TAX RATES
Taxable Estate*Base Taxes PaidMarginal RateRate Threshold**
$1 – $500,000$03.06%$1
$500,000 – $1 million$15,3005.0%$500,000
$1 million – $1.5 million$40,3005.5%$1 million
$1.5 million – $2.1 million$67,8006.5%$1.5 million
$2.1 million – $2.6 million$106,8008.0%$2.1 million
$2.6 million – $3.1 million$146,8008.8%$2.6 million
$3.1 million – $3.6 million$190,8009.6%$3.1 million
$3.6 million – $4.1 million$238,80010.4%$3.6 million
$4.1 million – $5.1 million$290,80011.2%$4.1 million
$5.1 million – $6.1 million$402,80012.0%$5.1 million
$6.1 million – $7.1 million$522,80012.8%$6.1 million
$7.1 million – $8.1 million$650,80013.6%$7.1 million
$8.1 million – $9.1 million$786,80014.4%$8.1 million
$9.1 million – $10.1 million$930,80015.2%$9.1 million
Over $10.1 million$1.082 million16%$10.1 million

That help?

Yes. But as I read this thread there is one scenario that has not been brought up but is very realistic. Medicaid! I wonder if you can put a card collection in an irrevocable trust? If you are unfortunate to have you or your spouse end up in a nursing home for any length of time, Medicaid will force the remaining spouse to spend down all your assets to about $80k. If your by yourself and you try to pass it down in a will you would be subject to Medicaid recovery. At $14k/month … you get the picture.


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[mrreality68]

Originally Posted by BobC

California currently has no estate or inheritance tax.

However, New York state does have an estate tax, but no inheritance tax. For 2022, the minimum threshold to be subject to New York's estate tax is $6.11M. As long as your taxable estate is worth less than this amount, there is no estate tax due New York. This exemption threshold amount is subject to change and goes up each year based on same inflation factor. However, New York also has a quirky twist to their estate tax law. As long as your estate value does not go up any higher than 105% of that estate tax exemption threshold, which for 2022 is $6,415,500 ($6.11M X 105%), you only pay New York estate tax on the value of the estate in excess of the 2022 exemption threshold amount of $6.11M.

But, go just $1 over the 105% amount of $6,415,500 to $6,415,501, and the entire value of the estate, including the previously exempt $6.11M, is now all subject to New York estate tax. And kind of like income taxes, New York estate taxes are calculated on a graduated tax rate schedule that starts at 3.06% on the first taxable dollars of the estate, and goes all the way up to 16.0% that starts once the taxable value of the estate goes over $10.1M. Here's New York state's current estate tax table for 2022 shown below.

So based on this, if someone passed away in 2022 and left the heirs a card valued for estate purposes at say $10M, and there was nothing else in the estate, that entire $10M would be subject to New York estate tax based on the table below, which would end up being $1,067,600 in estate tax due.


NEW YORK ESTATE TAX RATES
Taxable Estate* Base Taxes Paid Marginal Rate Rate Threshold**
$1 – $500,000 $0 3.06% $1
$500,000 – $1 million $15,300 5.0% $500,000
$1 million – $1.5 million $40,300 5.5% $1 million
$1.5 million – $2.1 million $67,800 6.5% $1.5 million
$2.1 million – $2.6 million $106,800 8.0% $2.1 million
$2.6 million – $3.1 million $146,800 8.8% $2.6 million
$3.1 million – $3.6 million $190,800 9.6% $3.1 million
$3.6 million – $4.1 million $238,800 10.4% $3.6 million
$4.1 million – $5.1 million $290,800 11.2% $4.1 million
$5.1 million – $6.1 million $402,800 12.0% $5.1 million
$6.1 million – $7.1 million $522,800 12.8% $6.1 million
$7.1 million – $8.1 million $650,800 13.6% $7.1 million
$8.1 million – $9.1 million $786,800 14.4% $8.1 million
$9.1 million – $10.1 million $930,800 15.2% $9.1 million
Over $10.1 million $1.082 million 16% $10.1 million

That help?

I know all this is good information and helpful

But for me let's get back to the Card and which is better the 9.5 or the 10. Let's see what people think the over under on the 9.5 will be. Let's continue to have members show off their cards. Lets talk about Mantle and share stories

To much Tax talk for me

[Exhibitman]

Originally Posted by Johnny630

files bankruptcy what happens to your cards then ?

This issue has been discussed before. They go into the bankruptcy estate and you become an unsecured creditor UNLSSS you record a UCC-1 in the state where the vault is located to put the world on notice of your ownership of the items. If you do that you elevate to the status of secured creditor and you are able to ask the court to return your items to you. If you do not, your cards get sold and maybe you get some money after all of the case costs, taxes and secured parties are paid off.

[Lorewalker]

Originally Posted by Exhibitman

This issue has been discussed before. They go into the bankruptcy estate and you become an unsecured creditor UNLSSS you record a UCC-1 in the state where the vault is located to put the world on notice of your ownership of the items. If you do that you elevate to the status of secured creditor and you are able to ask the court to return your items to you. If you do not, your cards get sold and maybe you get some money after all of the case costs, taxes and secured parties are paid off.

Is it at all in the realm of possibilities that after filing the UCC-1, the court would not return the items and instead use them to pay off the pool of secured creditors? I would assume that even as a secured creditor you are not guaranteed to get back 100% of what you are owed.

If that is even remotely a possibility it would be reason enough to not use a vault. I cannot imagine the bankruptcy court is sophisticated enough or cares enough to liquidate assets in the proper manner.

[BobC]

Originally Posted by Exhibitman

This issue has been discussed before. They go into the bankruptcy estate and you become an unsecured creditor UNLSSS you record a UCC-1 in the state where the vault is located to put the world on notice of your ownership of the items. If you do that you elevate to the status of secured creditor and you are able to ask the court to return your items to you. If you do not, your cards get sold and maybe you get some money after all of the case costs, taxes and secured parties are paid off.

Adam,

I defer to your knowledge, but I thought there was a difference in if you say consigned items to an auction house or sent them to a TPG who was holding on to them while being auctioned or graded, as opposed to having a valid lease type agreement where you technically rent space to store your personal items in. For example, if I rent an apartment and the landlord goes bankrupt, I've never heard of a tenant's furniture and belongings suddenly being at risk of sale by the bankruptcy court. Same thing for a bank safe deposit box or even a rental unit space. I've never had a vault space, nor seen an actual agreement they have someone sign. But I'm wondering if it isn't more like an actual leasing of space than just someone else holding your property. Interested in your answer. Thanks.

[Exhibitman]

Originally Posted by BobC

Adam,

I defer to your knowledge, but I thought there was a difference in if you say consigned items to an auction house or sent them to a TPG who was holding on to them while being auctioned or graded, as opposed to having a valid lease type agreement where you technically rent space to store your personal items in. For example, if I rent an apartment and the landlord goes bankrupt, I've never heard of a tenant's furniture and belongings suddenly being at risk of sale by the bankruptcy court. Same thing for a bank safe deposit box or even a rental unit space. I've never had a vault space, nor seen an actual agreement they have someone sign. But I'm wondering if it isn't more like an actual leasing of space than just someone else holding your property. Interested in your answer. Thanks.

those are different forms of property rights.

If you are a secured creditor and your item is there and identifiable, the court will order its return. thats the point of being a secured creditor.

[ElCabron]

LOL. There are hundreds of cards I'd rather have than that, including every single 1914 Baltimore News Babe Ruth that exists. But the best card in the hobby is one specific example of Oscar Charleston from the 1923-24 Billiken set that is not only the highest graded, but it also has the best image quality, which is critical to a photographic card like Billikens. Plus, I know we've all been familiar with the Rosen find for the last 40 years, but shouldn't anything that went through Mr. Mint's hands be worth considerably less than it otherwise would, due to the scumbag factor? I'll await your kind and gentle comments agreeing with me.

[Schlesinj]

Originally Posted by ElCabron

LOL. There are hundreds of cards I'd rather have than that, including every single 1914 Baltimore News Babe Ruth that exists. But the best card in the hobby is one specific example of Oscar Charleston from the 1923-24 Billiken set that is not only the highest graded, but it also has the best image quality, which is critical to a photographic card like Billikens. Plus, I know we've all been familiar with the Rosen find for the last 40 years, but shouldn't anything that went through Mr. Mint's hands be worth considerably less than it otherwise would, due to the scumbag factor? I'll await your kind and gentle comments agreeing with me.

Do you have a pick of that Charleston?

[BobC]

Originally Posted by Exhibitman

those are different forms of property rights.

If you are a secured creditor and your item is there and identifiable, the court will order its return. thats the point of being a secured creditor.

Okay, but that response didn't really answer the question at hand.

Isn't there a difference in having to file a UCC-1 as a secured creditor between giving your property to someone to do something for you, like when consigning it to an auction house or sending it to be graded by a TPG, as opposed to renting a space/unit and storing your property in it?

If you rent an apartment and put your belongings in it, and the landlord goes bankrupt, I've never heard of a tenant having to file anything to protect their property and stop a bankruptcy court from seizing their belongings. And I've never heard of someone seizing the property all the tenants have stored in their rental units, nor requiring them to have filed UCC-1s to protect what they are storing from being taken by the bankrupt landlord's creditors either. I would think the same would be the case for renting a space to store your items in someone's "vault", because that is technically what you're doing, just renting a space to store your property in.

I seem to remember in a prior thread about this when it was mentioned about bank safe deposit boxes being like these vault accounts, I believe it was you that had indicated there are specific laws in this regard that only apply to banks and customer's safe deposit box contents that protect them from such creditor seizures should the bank go bankrupt. However, aren't there also specific laws in regard to tenant/landlord relationships when the landlord files bankruptcy, such as how a security deposit cannot automatically get taken to satisfy creditors, and remains as an asset that is fully returnable to the tenant? I would assume this would go along with the fact that if a tenant stores property in the space they rented, as long as the rent is paid and current, that lease still continues and goes on and has to be honored by the bankruptcy court and/or creditors despite the landlord filing bankruptcy. And if so, wouldn't that also preclude the bankruptcy court, or any creditors, from violating a valid lease and going in and seizing property a tenant legally has stored there? I believe that is correct, and without the necessity of the tenant in having to file a UCC-1 to further protect themselves or their property.

And that is why I mentioned that I've never used a vault service, nor seen an actual vault agreement/lease to be able to see exactly how it is worded so I could possibly determine if it written similar to an actual tenant/landlord lease type agreement, and therefore possibly subject to the rules/laws afforded to such tenant-landlord agreements.

If it turns out that the way such a vault agreement is written/worded, so that it could possibly afford someone leasing a vault space some additional protections for their property being held in that space, that would be good to know for a potential vault user. Especially in the case of a vault owner/landlord bankruptcy, so a vault user's property was safe and they didn't have to worry about a UCC-1 filing to further protect it. That could be something valuable for members on here to find out about and know. One would hope that the various outfits offering vault services would have worded their leases/agreements in such a way to afford such protections to those choosing to use their vault services. It is possible though that different vault companies have different ways they've worded/written their agreements so that they don't all provide the same protections/assurances for their tenant's/users that they should, or could.

And that is also why I said I defer to the attorneys on here in regard to this issue. They can maybe help to confirm and get such info out to our members so they know if any one of the vault agreements from the various current providers may or may not be safe and protective of their items being stored in them. Or if they do need to go further and potentially need to think about something like a UCC-1 filing to further protect themselves and their property.

[luciobar1980]

If any of you are suggesting SGC just gave this card a 9.5 on a whim or because they wanted the notoriety, I think you're crazy. I guarantee that toning isn't very noticeable or significant in person. Of course when you zoom in on it at 500% actual size it's going to look worse.

[BobC]

Originally Posted by Johnny630

Thanks, Bob !

With these vaults...say the buyer actually wants to have the card in his hand. Say down the road 10 years or so the buyer retires and moves to a sales tax-free state like Nevada can he then have it shipped to his new residence in Nevada without having to pay his original state's sales tax at the time of purchase ?


I often wonder what happens if one of the owners/corporations of these vaults gets indicated or files bankruptcy what happens to your cards then ?

We'd discussed that very issue in other threads about taking a card out of a vault, and whether or not doing so would trigger sales tax for the buyer down the road then. First, sales taxes are all different for every state, so my advice would be to check the rules for whatever state it is you do currently live in. But as I said in some of those earlier emails, I do NOT believe you should be charged with paying sales tax if you leave a card you bought in a vault, and then take it out to bring home with you later on. The question is though, how long do you need to leave it in the vault before bringing it home so your state doesn't come after you for sales tax?

That is the $64,000 question, and there is no specific answer to that question for any specific state. If you have cards you win online or from auction houses sent to a vault, and then immediately have the vault owner forward the items to you in your state of residence that collects sales tax, I'm fairly confident your resident state's sales tax agents would be interested in discussing your somewhat obvious practice of trying to skirt the sales tax laws with you. But what if you wait say 6 months, 12 months, or longer, before taking your cards from the vault back to your home? California sales tax laws has a specific rule in it that says if you buy a car in a state with no sales tax or a lesser sales tax rate than California, and then within less than one year of buying it move to California and bring the car with you, California says you now owe them the difference of what you paid some other state for sales tax on that car, and what you would have paid California had you originally bought the car in their state. But wait at least one year or more before moving to California and bringing that car with you, and they won't ask you to pay a penny of sales tax to them on that car. Unfortunately, there isn't really any such similar rule specified in any state's sales tax laws for things like baseball cards. So, you kind of have to play things by ear and figure out for yourself how long to maybe leave items in a vault before taking them home. And be sure to check with whomever is operating the vault you are using to see if they have any rules or restrictions in place about sales taxes and taking things out of the vault. They may have certain understandings/arrangements with some state authorities in regards to sales taxes so that the states(s) don't come after them for potentially facilitating a form of tax evasion. Based on what California law says about sales taxes on vehicles, I would think that leaving cards in a vault for a year or more before removing them to take home would make it fairly safe to assume your resident state won't be looking for sales tax from you then on those cards.

In your specific case where the cards were left in the vault for 10 years, and then you retire and take them with you to your new home in Nevada, you would definitely not owe any sales tax to your original resident state. You would have to still be living in your original resident state with sales taxes to have any chance of being charged sales tax. In your scenario, the cards are never being held in a state with sales taxes. But a 10 year wait in a vault should do away with that sales tax issue regardless of whether you take the cards out and into a state with, or without sales tax. Think of it this way. Say you live in Nevada and then decide to move to another state that does have sales tax. You take all your furniture, clothes and belongings, that you never paid sales tax on in Nevada, with to your new home. No state that I am aware of is going to come along and now tell you that you need to pay them sales tax on all your belongings that you have now brought into their state.

As for your other question about what happens to your cards in a vault if the vault owner goes bankrupt, there had been some discussions about that as well. I am not an attorney, but believe that if you are renting a space in a vault to hold your cards, the treatment would be similar to what happens to property held in say a rental locker if the locker owner goes bankrupt. I don't believe your property can be taken because you are legally renting space with the now bankrupt entity, and the property you keep in that space is yours. However, if in the case of say consigning items to an auction house, if the auction house goes bankrupt while holding your items that can be a different story. In that case, you may need to actually be proactive and possibly do a UCC filing to demonstrate your ownership of property you had consigned to the now bankrupt entity to protect your interest. I'll leave it to our resident attorneys to better and more properly explain that situation.

[Johnny630]

That’s to both for explaining 👍