What is the tax basis for sports cards that are acquired via trade when reporting to the IRS?
Say someone has a rare Mickey Mantle rookie card that they bought for $10,000 and is now worth $50,000. Instead of selling it and paying a large capital gains tax, can they just trade it for similar cards worth about $50,000. Then sell those cards individually.
- Max HooplaLv 74 weeks ago
They would have a taxable gain on the trade because they got a $50,000 card in exchange for one with a $10,000 basis. They would still owe tax at the higher rate on collectibles.
- StephenWeinsteinLv 71 month ago
Officially, no. The law is that when you trade something, you must pay the same capital gains tax as if you had sold it. The basis is what you paid for it or the value of what you traded to get it. When you trade it, you pay tax on the value of what you get for it, minus the basis.
- 1 month ago
The cost basis is basically the value at the time of the trade.
- DIEGO.Lv 71 month ago
this is a good question!
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- JudyLv 71 month ago
Nope. doesn't work that way. Collectibles are not eligible as like kind exchanges. Even if they did qualify, you'd still only have a total basis of 10K allocated among the new cards, so you wouldn't save anything, would still owe capital gains tax on 40K.
- don_sv_azLv 71 month ago
The cost basis of the Mantle card would be $10K.
Legally one would owe taxes on the increased value $40K in the tax year the trade was made.