A little OT: Best way to liquidate modern cards?

qmayer

I have ~1000 modern cards worth $1-$10 each that I'm looking to clean out of my closet. What would be the best way of selling them? Dutch auction? Player lots? I tried player lots during the summer and players like Griffey, Thomas, and Clemens didn't sell (which make up the most of the cards). I'd like to get some money out of it to fund my set registry habit. If I can get 10% BV, I'll be happy. Any suggestions or stories?

RobE

Someone advised my of donating cards to charity as they are worth more in a tax write off in most cases.

Not your jersey cards not auto cards or #d ones but the cards nobody seems to be buying that have some sort of BV that you'll never get by selling on Ebay.

I'm going to look into this myself when I get more time but if anyone knows anything about how to go about this please elaborate.

crazysc

<< <i>Someone advised my of donating cards to charity as they are worth more in a tax write off in most cases.

Not your jersey cards not auto cards or #d ones but the cards nobody seems to be buying that have some sort of BV that you'll never get by selling on Ebay.

I'm going to look into this myself when I get more time but if anyone knows anything about how to go about this please elaborate. >>



It's a tricky subject - I think it's something that you can write off, but if you abuse it and get audited, Beckett book value isn't going to hold up unless you can show paying BV for the product. I know people who do this, donate $10,000 BV which is probably worth $500 and take that amount of a credit on their taxes - the lipstick on the pig looks fine unless it's scrutenized closely.

brucemo

Yes, it is absolutely illegal to do this.

You can't donate bulk items and then deduct the "per item" price.

You can't save all of the stamped mail that comes to your house, put it in a big trash bag, and then dump in on the doorstep of the Goodwill and deduct five cents per stamp because that's what the Scott catalog says the stamps are worth.

You can't buy a ton of screws from a builder's supply store, dump them on the doorstep of the Goodwill, and deduct the much higher per-screw price that Home Depot charges you for a little bag of them.

You can't dump $10,000 BV worth of commons, and deduct $10,000 (resulting in a $2,800 refund in most cases), when you know full well that you could only get $500 for this on eBay.

You can't dump a tub full of VGEX vintage and deduct full Beckett.

The bottom line here is that if you are going to donate some merchandise in order to get 28 cents on the dollar, when you know that you could not sell it for something close to the full dollar, you are committing tax fraud.

The tax deduction for donations to charity are supposed to be a way of encouraging donations to charity, not a way of selling your stuff to the government for more than you can get from anyone else. The government is supposed to be subsidizing 28% of it, not all of it, and it's certainly not supposed to be allowing you to make a profit by giving stuff away.

Whether or not you could get away with this, whether or not the government could figure it out and prove it, whether or not the government would take the time and trouble to prosecute you, this is all immaterial. You can make the same arguments about robbing a liquor store, and that's not legal either.

I've had this argument with people in the past. The tax codes are online, and it's very easy to find the pertinent passages.

The "donating cards to make a profit" scam is a federal crime.

bruce

1420sports

I would sell them all at once. With a nice write up for ebay, a solid reserve and an attractive BUY IT NOW price, you should have a nice smoooooooooth transaction and get the cash in a lum sum. Plus it beats the hell out of listing all of the cards separately and factoring in all of the fees.

Or throw an ad on the Buy Sell and Trade forum ....

Good Luck.

qmayer

bruce-

Thanks for your insight. I never thought that donating commons at book value would be considered tax fraud. I'm a full-time student so I don't have any income to where I would need or get a tax break.

I'm just looking to clear out some boxes of $1+ cards from my closet and hoping to get a few bucks for it. I doubt anyone is looking for 1000 $1 cards

RobE

Well,I'm not looking to get a bigger tax return out of this pile of cards.Rarely do I get a refund of any type since I run a business out of my home and just about everyone pays me by personal checks and cash.I have to keep track of every cent,save receipts for everything under the sun required to live and remain in business.I pay quite a bit in taxes and the last time I got a refund it was because I overpaid my taxes.All I'm looking for is a write off.Like the car I'm going to donate I was advised to donate this pile of cards as they are worth more in a write off than trying to sell them.Also,I was advised that you have to take pictures and not gauge your value from full beckett value but have to take the low bv.

It appeared to be a good idea to do this card donation within what the law allows.Also there is some Jewish organization out in NY that takes cars for donations and gives full market value tax credits.Are they breaking the law by telling me my car is worth more to me in a tax credit than if I try to sell it myself.I do realize automobiles and cards are apples and oranges but I'm not looking to do anything more than get write offs not scam profits from the govt to get a big refund.

JeffVN

Nope its legal. The donation aspect needs to be carfully looked at, and anyone that tries to write-off full book is an idiot asking to get auditied. I heard it done first by a card dealer in Nebraska (who wrote off cases of unopened material at roughly 30% of its book value. I've done it myself, writing off between 40-50% of the book value for NRMT to NM-MT commons and star cards from the early 80s and 90s. Extensive discussions with my accountant, led me to believe that it is not a problem if you do not push the envelope on the amount that you are trying to write-off. Problem oviously are created when you try to push the envelope by donating VG cards and write off the full book value. Pictures of the donated amterial help, as does retaining the beckett that you use to establish the value of the cards that you are donating.

brucemo

If you donate a car that you could sell for $1000, and you deduct $1000, it's as if you didn't make $1000 in income. Taxes on $1000 are $280, so essentially you gave away a $1000 car for $280. This is legal, and there is no real reason to do it unless you are feeling like giving money to charity, since that's basically what this is.

If you have a car that you could sell for $200, and you give it away and deduct $1000, you get $280 back on your taxes, so you just got $80 more for giving the car away than you could have for selling it. This is not legal.

I'm not trying to kill the original poster, I just feel that it is useful to point out that "giving cards away for profit" idea is tax fraud, so that people know what they are doing if they decide to do it. If someone is going to do it, fine, but know what you are doing beforehand.

As for how to get the most money for these cards, this is a harder question, since they are probably not desirable at all. You might be able to use them as filler in a Dutch auction. These wouldn't sell on eBay as singles, and if you sold the whole mess you'd probably do pretty badly as well.

If I were doing this, I would divide the cards up into lots, add something to each lot like a cheap GU card and a low-end rookie of a desirable player, try to even out the BV, and advertise it this way.

bruce

JeffVN

Bruce

I do not want to kick this horse any more than necessary. I agree with you completely on one point, if someone has questions about the practice, they SHOULD ASK A TAX PROFESSIONAL BEFORE THEY DO ANYTHING.

jaxxr

As a former tax professional,....

Tax deductions of "property" must be at no greater than fair market value. Is ebay fair market, is the local card store prices fair market, is a Beclett or SMR a good source of a fair market price ?
The tax law or the IRS says fair market value is the price at which property would change hands between a willing buyer and a willing seller. Neither has to buy or sell but both must have reasonable knowledge of all relavent facts involved.
Donations should be usually made at the LESSER of fair market value or your original price paid or there are capital gain ramifications. More forms and paperwork.
You MUST itemize in order to take contibutions as a deduction.
The amount of a contiribution deduction may be limited to a percent of your adjusted gross income.
It is unlikely any really large donation such as the $ 10,000.00 one suggested in a prior post, could be claimed in one year. There are carryovers for those situations.
Tax laws change/evolve each year and there are many different situations possible. IN GENERAL, a donation to a true qualified charity, of some commons which are fairly valued , is fine and certainly not illegal. There are limitations and plenty of rules regarding such but the key to get a fair market and cost value, then use the lower of the two.

RobE

That's the key word I meant to say,Jack.fair market value. Both the car and the cards are not worth the headache of finding a buyer for either at this point.I need write offs anyway and if I'm not breaking any laws by doing things fair then it sounds okay to me.Jeff,I'm going to consult my accountant after the holidays and see what CT tax laws permit.I'm glad to have seen Jack's insight on the matter and to have some attorney's advisory on the subject too.

If everything sounds too complicated (which it doesn't) then I'd probably break everything up into sets by teams and ebay them that way.If it's one of the complete sets than I'd guess that would be the route to take.

Thanks too,Bruce.I see what you are saying about cheating Uncle Sam but that wasn't the case I was trying to make.

Also thanks to the original poster for raising this discussion.Good luck in moving your cards.

KING KELLOGG

Here's a thought...

What I do is donate unwanted cards to my local Little League associations....

Forget about the few dollars that you would of made on a bunch of cards you really didn't want...

Let the youth leagues set up their own sport card auction, and let them keep all proceeds...

That way the charitable organization (youth baseball, soccer, Boy Scouts, Brownies, whatever) gets to have items for their auction and make some green dollars, they usually have a ball doing so, it provides another way for parents and kids to bond, and you don't have to buy that 3 year old pepperoni for $2 a stick!!!

Charities are great at organizing fund raisers...Let them have the cards!!!

Think about it??? Would you rather have a few bucks in your pocket and have unknown IRS
questions hounding you........OR.....Simply help out and support your local ball field????


I donate 200,000 or 300,000 unwanted cards to leagues, churches, etc, every year and feel GREAT about helping them!


Any other stories???


Thanks!!

Larry.

RobE

Larry!! Thanks for the new spin on things! You gave me an incredible idea to throw about for a few days. I think something like you suggest could fly!

Have a great holiday!

Rob

anjcollection

Back to the original question here (and thanks for all the talk about taxes, I've often wondered about donating my cards), but Beckett's online buy/sell/trade boards are usually good for me whenever I open new boxes (very rarely do I, but recently I opened 03 topps and ultra) and was able to dump a bunch of it on Beckett's site.

People collect all kinds of stuff.. team lots, player lots, subset lots, inserts, etc. etc.

mcdee2

I donate every year to the local Ronald Mcdonald house. I am not rich, nor am I poor. Every box I open, I place the commons, unwanted low end rookies and inserts in a box. Typically each year I donate somewhere around 100,000-200,000 cards. The people running the Ronald Mcdonald house spread the cards out to some others that are reasonably close. In return, I take a $2000 deduction each year. As stated above, I think the key is keeping a decent ratio of donation to income. A person who takes the 2000 dollar deduction yet only earns 15k per year is obviously going to be far more scrutinized and for my wife and I, the 2000 represents a fairly small percentage of our gross income. King Kelloggs is doing a wonderful thing with his donation, but with three kids, two cars, a substantial morgate and a sports card collecting addiction, I am only too happy to take what I consider to be a very fair and honest tax deduction, at the same time helping the sick and needy.

Cyphilissb

I have about 150000 commons from 1980 to present, how would i go about giving those too goodwill and what do you guys think would be a fair tax deduction? please pm because i don't think ill remember to check this post. - thanks, andrew

dude

I've been buying cards as an adult since 1990. In 1990-1993 I bought a lot of modern stuff that turned out to be worth next to nothing. A lot of it was unopened boxes, factory sets and rookie cards. Over those 4 years it filled up a closet. When I jumped on eBay in 1999, I became a "dealer" (isn't everyone nowadays?). I did really well selling pre-1970 stuff and found out quick that modern stuff was a complete waste. I checked with a CPA with the fear of income tax audits on my significant eBay vintage card profits, and he confirmed that if I had a huge "firesale" on the modern stuff and took a beating on it, I could write off my net loses on the modern junk against the profits on the vintage stuff. So in other words, if I bought a 1991 Upper Deck Wax box for $50 and sold it for $10, I could write off $40 against my profits. If I donated the wax box, it would only be a $10 tax write off since that's it's donation value (current market value).

mikeschmidt

dude -- wouldn't you need pretty detailed records of the "alleged" purchase prices of all of the things you were selling at a loss? Though I totally agree with you -- without receipts, etc. it might be pretty hard to truly document a loss....

MS

jaxxr

As I stated prior, tax laws constantly change/evolve, a receipt is a good thing to have and makes a validation more complete and accurate,....but

Do you get receipts at card shows ? from all card shops ? when you buy the paper from a newstand ? probably not, although they are all proper and legal transactions. Record keeping is a complete book from the IRS, as usual there are many variables, but a paper reciept is not always needed to verify your claims to purchases.

It seems to me if a group of "commons" is worth about a hundred or so dollars, why even try to write it off as a donation, you would typically get about 25 to 35 dollars actual extra refund, while doing extra paper work and worry about audits, Etc. Just donate them and enjoy the good feelings you get. If the group is worth a few hundred or more, you should have no trouble selling them via the net, probably at a discount, but still get some money.

dude

mikeschmidt,

Actually, my record keeping pretty much boils down to this: on big purchases at shows where I buy 100 or 200 vintage commons from a dealer, I pay by check or credit card and I still have all my canceled checks from 1988. I pay my grading fees on one credit card and I have all of my account statements from way beyond when I started at PSA. When I traveled to shows, I saved the airplane tickets, hotel bills, and rentacar receipts. For keeping track of my eBay sales, I've saved all my postage insurance receipts which lists the final sales price of the auctions to each buyer. There have been a lot of cash purchases, but I think I could come up with some accurate numbers in the event of an audit.

Now on the early 90's stuff, it is a bit messy, but I did buy a lot of the unopened stuff at Sam's Wholesale and still have the receipts, but most of the single cards were paid by cash. The CPA told me to just document what I think I paid for the stuff as best as I can and that should be OK.