ROI Rule of Thumb?

[wem1472]

Curious if anyone has a %ROI that they use to determine when its time to move a card out?#@

[jcardstore]

I haven't really flipped or held much but I would say what I'm trying to do is buy in the offseason between year 1 and 2 for a player and then flip mid season. I mean, for you to profit after taxes, fees, shipping, etc I'm guessing you need to make a minimum of 30-40%.

Just assume 20% off the top is gone.

[auctionjmm]

I haven't really flipped or held much but I would say what I'm trying to do is buy in the offseason between year 1 and 2 for a player and then flip mid season. I mean, for you to profit after taxes, fees, shipping, etc I'm guessing you need to make a minimum of 30-40%.

Just assume 20% off the top is gone.

Good analysis. In the past I would take far less at card shows knowing there are no eBay fees (although you could argue that the table fee needs to be accounted for). I've sold cards for $25 that I bought for $20 if it was a cash deal at a show.

But for eBay it's gotta be 40% unless you are really trying to get out of something. But there are caveats to that in if the player is scorching hot I would not sell at 40%. I invested in Lamar Jackson Select rookies at the start of last season and didn't sell until I was around 500%. But that was a pretty obvious hold as time went on.

[wem1472]

I haven't really flipped or held much but I would say what I'm trying to do is buy in the offseason between year 1 and 2 for a player and then flip mid season. I mean, for you to profit after taxes, fees, shipping, etc I'm guessing you need to make a minimum of 30-40%.

Just assume 20% off the top is gone.


That's a good point. I always calculate for fees and make sure my ROI goal already takes those into account. So you happy with 10-20% ROI if I read correctly?

[DajuanWagner]

I collect what I like and I like what I collect...…..

[jcardstore]

That's a good point. I always calculate for fees and make sure my ROI goal already takes those into account. So you happy with 10-20% ROI if I read correctly?

I would be happy with any % of profit. There will always be cases where you look back and wish you would have held but profit is profit. There are also going to be cases where you look back and wish you would have sold.

I would never hold a player past year 3, I think that's when profits really start to decline hard. It's extremely rare that a player breaks out in his 3rd-4th season and even more rare to appreciate in value past that (unless you're an absolute legend).

I think the sweetspot is year 1-2 offseason.

For example I've been buying some Cam Reddish stuff that I intend on moving during the season once things start to get hot. I would like to double my money but unless he goes crazy that seems unlikely. If I could do 50% (pre taxes / fees) I'd be happy with that

[gmoney000]

Never sell...buy and HODL

[epatmythes]

My annual target is 20%.

I stopped looking at individual sales ROI years ago... it's the fastest way to go broke... or to at least fool yourself into believing you are doing better than you really are!

Take money when the money is there! For every card I've sold for a 1000% ROI... I probably have 15 others I sold for a 50-75% loss!

It's taken me 30 years to get to this point, but I feel like the last couple of years I've finally found balance in this hobby. I can laser focus my pursuits for what I consider "my PC", I can afford to have a small (yes, small, maybe 20-30 cards) I can hold strictly as investment risk, and then there is EVERYTHING ELSE... and EVERYTHING ELSE is 100% FOR SALE if the price is right. Right might mean a 50% loss, and other times Right might mean a 500% profit... but, now, I'll always sell if the money is right at that moment in time!

Last year I closed the year at a 17% profit margin, before taxes. This year, I'm currently sitting at 23%. Does it hurt the heart and brain to think back to what I previously sold cards for... like LeBron TC PSA 10 rookie, or 2011 Update Trout Diamond PSA 10... yes, it sure does. But, I have dozens more that I made more money on that aren't worth half, today, what they were then.

At the end of the day (or in my case, year)... it comes down to one question... "Am I making or losing money in this hobby?" As long as that answer is yes, I'm making money, life goes on and so does my PC!

[jcardstore]

My annual target is 20%.

I stopped looking at individual sales ROI years ago... it's the fastest way to go broke... or to at least fool yourself into believing you are doing better than you really are!

Take money when the money is there! For every card I've sold for a 1000% ROI... I probably have 15 others I sold for a 50-75% loss!

It's taken me 30 years to get to this point, but I feel like the last couple of years I've finally found balance in this hobby. I can laser focus my pursuits for what I consider "my PC", I can afford to have a small (yes, small, maybe 20-30 cards) I can hold strictly as investment risk, and then there is EVERYTHING ELSE... and EVERYTHING ELSE is 100% FOR SALE if the price is right. Right might mean a 50% loss, and other times Right might mean a 500% profit... but, now, I'll always sell if the money is right at that moment in time!

Last year I closed the year at a 17% profit margin, before taxes. This year, I'm currently sitting at 23%. Does it hurt the heart and brain to think back to what I previously sold cards for... like LeBron TC PSA 10 rookie, or 2011 Update Trout Diamond PSA 10... yes, it sure does. But, I have dozens more that I made more money on that aren't worth half, today, what they were then.

At the end of the day (or in my case, year)... it comes down to one question... "Am I making or losing money in this hobby?" As long as that answer is yes, I'm making money, life goes on and so does my PC!

Wouldn't that be a loss overall?

[GeechQuest]

Wouldn't that be a loss overall?

He’s getting taxed on that 17%, not the entirety of his sales.

[jcardstore]

He’s getting taxed on that 17%, not the entirety of his sales.

Ah, yea thanks. I'm an idiot.

I thought you got taxed on total sales, not profit.

[byronscott4ever]

I collect what I like and I like what I collect...…..

That’s my same thought but if I buy to flip, I’m just trying for any profit but if I buy a lot for a single card to PC, even losing money could be okay

[epatmythes]

Wouldn't that be a loss overall?

No. That 17% profit is after all ebay fees, paypal fees, postage, etc. I setup my card stuff as a business. I fully walked into my accountants office with all my records expecting to have about a $1K tax bill... but when all was said and done, I actually ended up getting $75 back on my tax return. So, I guess you could say my 2019 profit was a 17% ROI + 75 bucks :)

This years been crazy in the hobby though. My profit margin is up and my sales volume will likely be close to triple that of 2019. I've got several thousand dollars stashed away this year that I fully expect to be handing over to Uncle Sam come February! So, what is currently sitting at a 23% profit margin, will probably get chopped down to 19-20% when all is said and done (hopefully).

[GeechQuest]

Ah, yea thanks. I'm an idiot.

I thought you got taxed on total sales, not profit.

You're not an idiot. This stuff is confusing.

Also, to all the "investors" and "businessmen" who see what epatmythes wrote and scoff at his margins, those are some of the highest margins I've ever seen from flipping cards. I know guys who had been running between 9-13% and were spending 7 figures annually. Very happy for you epatmythes, that's an amazing 2 year run!

[gameissued]

ROI is nice but there are tons of times when taking a loss was the best move for me too.. in terms of just moving a card for cash or something else.

[jcardstore]

You're not an idiot. This stuff is confusing.

Also, to all the "investors" and "businessmen" who see what epatmythes wrote and scoff at his margins, those are some of the highest margins I've ever seen from flipping cards. I know guys who had been running between 9-13% and were spending 7 figures annually. Very happy for you epatmythes, that's an amazing 2 year run!

I'm for sure going to talk to my accountant but it seems like the best thing to do is setup a business and run it like that.

I was able to basically double my money on my Triston McKenzie stuff and that kind of funded a lot of the KPJ/Cam stuff I've picked up recently so I guess I should start tracking.

[GeechQuest]

I'm for sure going to talk to my accountant but it seems like the best thing to do is setup a business and run it like that.

I was able to basically double my money on my Triston McKenzie stuff and that kind of funded a lot of the KPJ/Cam stuff I've picked up recently so I guess I should start tracking.

Absolutely do that.

My first ever foray into eBay seriously, the tax bill the following year was $13K. I was an idiot and didn't even think about it when flipping things so I never ran properly and didn't track jack.

The following year I was set up properly and accounted for everything, and my tax bill came out to $900.

A very expensive lesson on my part. Oooops.

[GoNYGoNYGo]

For those of you who have set it up like a business do you have any advice for those of us who haven't done it that way but want to transition it to that? I never thought about doing it that way but all of a sudden I was adding up my collection for insurance purposes and with the explosion of prices and grading and hitting a few big cards my collection is all of a sudden closing in on 30-40K and I feel like as I buy/sell more I should track it like a business. But how do I account for all the costs and every associated with my current inventory?

[epatmythes]

You're not an idiot. This stuff is confusing.

Also, to all the "investors" and "businessmen" who see what epatmythes wrote and scoff at his margins, those are some of the highest margins I've ever seen from flipping cards. I know guys who had been running between 9-13% and were spending 7 figures annually. Very happy for you epatmythes, that's an amazing 2 year run!

Thanks!

Funny story. When my CPA completed my taxes last year, the last question he asked me when I went to his office to pick them up, was, "Are you really okay with that margin, that's not a lot?" I just laughed. I told him, in this hobby, I'm just happy to have turned a profit!

I have a full time job. This hobby is honestly like another full time job to make this little! A lot of late nights listing auctions from 9-11pm, when I'd rather be in bed. A lot of late nights staying up until 1-2am packaging sales so I can meet my eBay 1 business day shipping mark. A hell of a lot of work in a given year for a profit margin total which will only be $20K (or less).

I could honestly make more $$$ in a year getting a part time job delivering Dominos... but, damn, being in this hobby is a lot more fun!

[GeechQuest]

Thanks!

Funny story. When my CPA completed my taxes last year, the last question he asked me when I went to his office to pick them up, was, "Are you really okay with that margin, that's not a lot?" I just laughed. I told him, in this hobby, I'm just happy to have turned a profit!

I have a full time job. This hobby is honestly like another full time job to make this little! A lot of late nights listing auctions from 9-11pm, when I'd rather be in bed. A lot of late nights staying up until 1-2am packaging sales so I can meet my eBay 1 business day shipping mark. A hell of a lot of work in a given year for a profit margin total which will only be $20K (or less).

I could honestly make more $$$ in a year getting a part time job delivering Dominos... but, damn, being in this hobby is a lot more fun!

People who haven't really tried to legitimately monetize cards may not understand how high those margins truly are.

Cards are VERY tough to scale. Not impossible, but very tough.

If I gave 100 people $1M and told them to buy cards and profit this year, 95 of them couldn't do it, and 3 of the remaining 5 couldn't do it year after year.

The guys who have the biggest profits are guys who get into rare things and never sell. That's not an actual business though and isn't replicated year after year.

[MNCards]

Buying/selling cards is alot like trading commodities. I'm a commodity broker and here are a few saying I always tell my clients.

1. Bulls and Bears make money, but hogs get slaughtered.

2. Better to be out of a trade wishing you were still in, than being in a trade wishing you were out.

3. A profitable trade is ALWAYS a good trade.

4. A small loss is better than a big loss.

5. Rear veiw mirror marketing - If all you do is look at the past (look in the rear view mirror), you're going to get in a wreck. There is a reason the windshield is bigger than the rear view mirror. You need to be looking ahead at the market that is ahead of you. You glance back in the rear view mirror to see what you did right and wrong and learn from it, but always focus on the next opportunity.

6. The purpose of the market is to cause the most pain to the most people in the shortest amount of time.

If there is some profit, take it. If it's moving against you, get out. You can always get back in, or buy something else.

Gregg

[wem1472]

Buying/selling cards is alot like trading commodities. I'm a commodity broker and here are a few saying I always tell my clients.

1. Bulls and Bears make money, but hogs get slaughtered.

2. Better to be out of a trade wishing you were still in, than being in a trade wishing you were out.

3. A profitable trade is ALWAYS a good trade.

4. A small loss is better than a big loss.

5. Rear veiw mirror marketing - If all you do is look at the past (look in the rear view mirror), you're going to get in a wreck. There is a reason the windshield is bigger than the rear view mirror. You need to be looking ahead at the market that is ahead of you. You glance back in the rear view mirror to see what you did right and wrong and learn from it, but always focus on the next opportunity.

6. The purpose of the market is to cause the most pain to the most people in the shortest amount of time.

If there is some profit, take it. If it's moving against you, get out. You can always get back in, or buy something else.

Gregg


One of favorite posts ever!


Sent from my iPhone using Tapatalk

[JMarchand1981]

Ah, yea thanks. I'm an idiot.

I thought you got taxed on total sales, not profit.

If you don't set up as a business, you get taxed on sales. If you set up as a business, you can deduct expenses.

[chandman]

It just depends if you are selling lots or individual. I try to run sales of large amounts of individual cards. If I can accrue my ROI by only selling a portion of my investment, the remaining cards are just a toss in.

So if I buy a 100 card lot, I may plan on the top 25-50 of the cards to pay off my investment. Then I have more flexibility with the rest.

[MNCards]

For those of you who have set it up like a business do you have any advice for those of us who haven't done it that way but want to transition it to that? I never thought about doing it that way but all of a sudden I was adding up my collection for insurance purposes and with the explosion of prices and grading and hitting a few big cards my collection is all of a sudden closing in on 30-40K and I feel like as I buy/sell more I should track it like a business. But how do I account for all the costs and every associated with my current inventory?

Start with a spreadsheet. If you have insurance on your collection, you must have a list of your inventory. Make a spreadsheet listing each item and what you paid for it. Include shipping as part of the price. If you take a raw card and get it graded, include the grading cost as part of the price of the card. Also, keep track of every penny you spend on cards, supplies, postage, mileage (to shows/shops/PO, etc). It is all either a deductible expense or something you can add to the initial price of your inventory.

When you sell, if someone pays you for shipping, that is considered income. It gets offset by the expense of your acual shipping cost and supplies. If it is FREE shipping, the additional cost is factored into the cost of the card you sold, reflecting a higher margin, but you still have the postage and supplies to show as an expense.

Gregg

[Dame]

If you don't set up as a business, you get taxed on sales. If you set up as a business, you can deduct expenses.

So for people lets say who have sold upwards of $30,000 it’s recommended to file this as a business come tax time.

[MNCards]

If you ever get audited, your going to wish you would have. As far as the IRS is concerned, if you selling anything to anyone for as little as $1, it is taxable income unless you can show the cost of the item or expenses associated with it to deduct from the income.

[Blanketcards]

Buying/selling cards is alot like trading commodities. I'm a commodity broker and here are a few saying I always tell my clients.

1. Bulls and Bears make money, but hogs get slaughtered.

2. Better to be out of a trade wishing you were still in, than being in a trade wishing you were out.

3. A profitable trade is ALWAYS a good trade.

4. A small loss is better than a big loss.

5. Rear veiw mirror marketing - If all you do is look at the past (look in the rear view mirror), you're going to get in a wreck. There is a reason the windshield is bigger than the rear view mirror. You need to be looking ahead at the market that is ahead of you. You glance back in the rear view mirror to see what you did right and wrong and learn from it, but always focus on the next opportunity.

6. The purpose of the market is to cause the most pain to the most people in the shortest amount of time.

If there is some profit, take it. If it's moving against you, get out. You can always get back in, or buy something else.

Gregg

#1 Rule is you will never go broke taking a profit!

[Dame]

If you ever get audited, your going to wish you would have. As far as the IRS is concerned, if you selling anything to anyone for as little as $1, it is taxable income unless you can show the cost of the item or expenses associated with it to deduct from the income.

Going back to this, would an Ebay/Paypal invoice suffice to show the initial cost of the item?

[epatmythes]

Going back to this, would an Ebay/Paypal invoice suffice to show the initial cost of the item?

For something you purchased, for resell later, yes, that would suffice for that item.

[Vinny1984]

For something you purchased, for resell later, yes, that would suffice for that item.

So I’ve done 100% of my buying/selling through eBay/paypal. Graded everything through Jewcer and kept all my receipts from the retail wax I happened to find. I’ll end the year at around $35,000 in sales. What needs to be done to classify myself as a business?

[GeechQuest]

So I’ve done 100% of my buying/selling through eBay/paypal. Graded everything through Jewcer and kept all my receipts from the retail wax I happened to find. I’ll end the year at around $35,000 in sales. What needs to be done to classify myself as a business?

Link up with an accountant man.

Give them your receipts and the tax bill you’ll be getting from PP.

Let them handle it for you.

[Vinny1984]

Link up with an accountant man.

Give them your receipts and the tax bill you’ll be getting from PP.

Let them handle it for you.

So I’m not totally screwed by not classifying for a business before I turned into a degenerate card mover?

Much respect to you tax guys. It takes a certain IQ to understand the little nuances that go into taxes and clearly I don’t possess that.

[auctionjmm]

People who haven't really tried to legitimately monetize cards may not understand how high those margins truly are.

Cards are VERY tough to scale. Not impossible, but very tough.

If I gave 100 people $1M and told them to buy cards and profit this year, 95 of them couldn't do it, and 3 of the remaining 5 couldn't do it year after year.

The guys who have the biggest profits are guys who get into rare things and never sell. That's not an actual business though and isn't replicated year after year.

I disagree unless you are talking about purely flipping singles. My business has 3 components: 1.) Buying and selling wax. 2.) Opening cases and selling the contents. 3.) Buying and re-selling singles.

Buying and selling wax for resale has become easier with Panini's FOTL program and Dutch Auctions. I have done very well with that since inception.

Opening cases and selling the contents works for products like Heritage, Flagship, and a few other random ones. When Heritage was $700/case I always had $1400 as a target for selling the contents and usually hit it. I will need to dial back those expectations for 2021 due to increased cost but would still expect a nice ROI.

Buying and re-selling singles is trickier but it can be done if you buy in bulk. I look for part time card dealers or collectors who are more likely to sell their collections. Last February I offered a guy $2700 for his entire table at a show and I am over 10k in sales and still have stuff left. It is much easier to buy collections in bulk and piece out the contents.

I rarely, rarely attempt 1 for 1 investments. (eg. Buy a single card for $100 and try to profit). So my margins are reflective of my overall business model and not just buying individual cards for resale. I think when you have multiple facets like this, the margins can be much greater.

[auctionjmm]

So I’m not totally screwed by not classifying for a business before I turned into a degenerate card mover?

Much respect to you tax guys. It takes a certain IQ to understand the little nuances that go into taxes and clearly I don’t possess that.

Anyone who sells cards is technically "classified" as a business. For IRS purposes if you sold even one card on eBay, you are a business. Most casual sellers ignore this and decide not to report their card income. That's okay for as long as they don't get caught or if they truly believe they are simply a hobby then they can claim hobby income instead of calling themselves a business. But there are exclusions for hobbies and you don't get as many deductions.

Now, if you are talking about getting a resale license, applying for a business name, bank account, etc...then that takes a bit longer. But for federal tax purposes you should still be able to treat all of 2020 as a business.

[Vinny1984]

Anyone who sells cards is technically "classified" as a business. For IRS purposes if you sold even one card on eBay, you are a business. Most casual sellers ignore this and decide not to report their card income. That's okay for as long as they don't get caught or if they truly believe they are simply a hobby then they can claim hobby income instead of calling themselves a business. But there are exclusions for hobbies and you don't get as many deductions.

Now, if you are talking about getting a resale license, applying for a business name, bank account, etc...then that takes a bit longer. But for federal tax purposes you should still be able to treat all of 2020 as a business.

Thank you!

[GeechQuest]

I disagree unless you are talking about purely flipping singles. My business has 3 components: 1.) Buying and selling wax. 2.) Opening cases and selling the contents. 3.) Buying and re-selling singles.

Buying and selling wax for resale has become easier with Panini's FOTL program and Dutch Auctions. I have done very well with that since inception.

Opening cases and selling the contents works for products like Heritage, Flagship, and a few other random ones. When Heritage was $700/case I always had $1400 as a target for selling the contents and usually hit it. I will need to dial back those expectations for 2021 due to increased cost but would still expect a nice ROI.

Buying and re-selling singles is trickier but it can be done if you buy in bulk. I look for part time card dealers or collectors who are more likely to sell their collections. Last February I offered a guy $2700 for his entire table at a show and I am over 10k in sales and still have stuff left. It is much easier to buy collections in bulk and piece out the contents.

I rarely, rarely attempt 1 for 1 investments. (eg. Buy a single card for $100 and try to profit). So my margins are reflective of my overall business model and not just buying individual cards for resale. I think when you have multiple facets like this, the margins can be much greater.

I was just talking about flipping singles, I should have clarified. That's what the majority of this board talks about and what the majority of people who are in the hobby to make money do.

I know you do it differently and I know you're one of the few that are effective year after year. The majority aren't and can't be/won't be because the margins and scale aren't really there for singles, though that does seem to be changing a bit with bass cards taking off.

[epatmythes]

So I’m not totally screwed by not classifying for a business before I turned into a degenerate card mover?

Much respect to you tax guys. It takes a certain IQ to understand the little nuances that go into taxes and clearly I don’t possess that.

I'm not a CPA... that's why I pay one... but an individual can file a Schedule C (profit/loss from business) as a sole proprietor or single-member LLC. I'm pretty sure you don't need to actually register with your state as a licensed business to be considered a sole proprietor... but check with a real CPA to know for sure (don't trust this old random guy on the internet). Personally, I am a single-member LLC and register/file with my state every year. That's the route I choose, but yeah, you should definitely talk with a CPA to better understand what would work best for you!

[Vinny1984]

I'm not a CPA... that's why I pay one... but an individual can file a Schedule C (profit/loss from business) as a sole proprietor or single-member LLC. I'm pretty sure you don't need to actually register with your state as a licensed business to be considered a sole proprietor... but check with a real CPA to know for sure (don't trust this old random guy on the internet). Personally, I am a single-member LLC and register/file with my state every year. That's the route I choose, but yeah, you should definitely talk with a CPA to better understand what would work best for you!

Yeah I’m definitely going to get a professional involved. Just wanted an idea of what I’m in for. Thanks for the info. Much appreciated!

[MNCards]

You can say you are a business, but if you don't treat it as one, the IRS will call it a hobby, and then you can't deduct expenses.

My advise is if you are going to treat it as a business, get a separate bank account for just your card business. Keep track of penny you spend and earn. You should not need a separate tax id. You would be considered a sole proprietor, which is how I"m set up as of now. I do have a state sales tax number, but that is for reporting state sales tax on the shows I sell at.

Gregg

[auctionjmm]

You can say you are a business, but if you don't treat it as one, the IRS will call it a hobby, and then you can't deduct expenses.

My advise is if you are going to treat it as a business, get a separate bank account for just your card business. Keep track of penny you spend and earn. You should not need a separate tax id. You would be considered a sole proprietor, which is how I"m set up as of now. I do have a state sales tax number, but that is for reporting state sales tax on the shows I sell at.

Gregg

While this is legally true, the IRS won't usually bother you if you are profitable. A profitable entity is for all intents and purposes a business. To get audited AND classified as a hobby would be rare, and if you can prove profit motive you can beat the "hobby" classification.

[bjackson1981]

So I’ve done 100% of my buying/selling through eBay/paypal. Graded everything through Jewcer and kept all my receipts from the retail wax I happened to find. I’ll end the year at around $35,000 in sales. What needs to be done to classify myself as a business?

Here is what I do/take to my accountant and I'm around your yearly sales.

I have all sales, which is easy with the 1099 from paypal.

For expenses, I have totals of all cards bought, grading fees, postage, supplies, and any other costs associated with the "business" (new computer, ink, printer, etc). My account takes a percentage of my mortgage, internet, phone, any other home expense and gets write offs for those as well, as a corner of my basement is where everything is happening, its essentially an office. Essentially any cost associated with the business is an expense.

This will be the third year I'll be expecting a 1099 from paypal and the first and second year I showed a loss as I was essentially building assets for the business. This year I will have a profit as with the explosion of prices on singles and too many consecutive years of losing money, the IRS will want to know why your running a business continues to lose money.

Not sure what others do, but this is what my accountant and I do for mine.

[rangeljon]

So I’m not totally screwed by not classifying for a business before I turned into a degenerate card mover?

Much respect to you tax guys. It takes a certain IQ to understand the little nuances that go into taxes and clearly I don’t possess that.

No. Not at all. You honestly don't even need one. But it is advantageous if you're buying lots of wax from dealers or other card businesses and have a Tax ID.

And even though I have an LLC, my CPA moved it onto a Schedule C this year for the first time.

Really helped clean up and simplify things.

[Dame]

Good stuff guys. I made a very decent amount of money just by moving 8-10 items which already is about $30k -all through Paypal.


Appreciate all the input here. Cheers

[epatmythes]

No. Not at all. You honestly don't even need one. But it is advantageous if you're buying lots of wax from dealers or other card businesses and have a Tax ID.

And even though I have an LLC, my CPA moved it onto a Schedule C this year for the first time.

Really helped clean up and simplify things.

Also of note, you can apply for a state resale license, and with that, you can file it with eBay and stop paying sales tax on your purchases there! That's been a 6% savings for me as most, if not all, of my eBay buying at this point is singles intended for grading (and then resell).

[jcardstore]

Also of note, you can apply for a state resale license, and with that, you can file it with eBay and stop paying sales tax on your purchases there! That's been a 6% savings for me as most, if not all, of my eBay buying at this point is singles intended for grading (and then resell).

Does that save you on both purchases and sales?

[epatmythes]

Does that save you on both purchases and sales?

Just purchases. Sales tax, on sales, is all managed by eBay at this point, so it's completely hands off.

However, being in Michigan with a resale license, I do have to collect sales tax on all my off-eBay sales that run through Paypal for stuff I'm selling to other Michigan residents.

So, there is good & bad with having a resale license. If your selling off eBay too, you do have to track all that as well, and file your sales tax every year (some states are monthly, quarterly, etc... really depends on volume)!

Michigan just switched to automatic collection this year on eBay... so I guess I'll find out come tax time how that works out now. In the past, the ebay money would funnel to me and I was responsible for remitting it all. Now, eBay does it for you for states they are required to collect for, so that money no longer funnels to me, but I guess, right to the State.

[TacoUniform]

Buy high sell low.

[buckunteer]

I collect what I like and I like what I collect...…..

Yep.

I've found that, on the rare occasions I need/choose to sell PC stuff, it has risen substantially from my initial acquisition. But that's because I collect 90s MJ. The exception is when I thin my Ohio State PC occasionally. I will lose on those because college stuff doesn't hold as much value, but I'm ok with that. I only sell those cards when I upgrade the auto (I'm going for 1 auto of as many Buckeyes as possible and upgrade those I do have when I can) so it just helps recoup whatever I spent on the new card.

[Dame]

Also of note, you can apply for a state resale license, and with that, you can file it with eBay and stop paying sales tax on your purchases there! That's been a 6% savings for me as most, if not all, of my eBay buying at this point is singles intended for grading (and then resell).

This is huge. Thanks again man.

[Ericc5Bears]

Here is what I do/take to my accountant and I'm around your yearly sales.

I have all sales, which is easy with the 1099 from paypal.

For expenses, I have totals of all cards bought, grading fees, postage, supplies, and any other costs associated with the "business" (new computer, ink, printer, etc). My account takes a percentage of my mortgage, internet, phone, any other home expense and gets write offs for those as well, as a corner of my basement is where everything is happening, its essentially an office. Essentially any cost associated with the business is an expense.

This will be the third year I'll be expecting a 1099 from paypal and the first and second year I showed a loss as I was essentially building assets for the business. This year I will have a profit as with the explosion of prices on singles and too many consecutive years of losing money, the IRS will want to know why your running a business continues to lose money.

Not sure what others do, but this is what my accountant and I do for mine.

Thank you for this response, this is the easiest one to understand in the entire thread so hopefully the information is legitimate haha. Just wanna run an overly-simplified hypothetical by you that hopefully you (or anybody else with knowledge) can answer. Let's say I spent 20k on cards in 2020. I sold 15k in cards, but am holding approximately 10k that I will sell at a later date. Would I then be able to report a loss of 5k on my taxes for 2020?

[rangeljon]

Thank you for this response, this is the easiest one to understand in the entire thread so hopefully the information is legitimate haha. Just wanna run an overly-simplified hypothetical by you that hopefully you (or anybody else with knowledge) can answer. Let's say I spent 20k on cards in 2020. I sold 15k in cards, but am holding approximately 10k that I will sell at a later date. Would I then be able to report a loss of 5k on my taxes for 2020?

They would use all the information you just gave. Long answer short: No. You didn't take a $5k loss if you're in possession of $10k inventory.

Here's verbatim what my CPA asked for...

Hello Jon,

My name is XXXX and I am working for XXXXX to help prepare your 2019 income tax return. You received a 1099K for $38,270.81 from PayPal reporting sales of sports cards. I also have a list of ending inventory. Can you give me the cost of:

Beginning inventory ______________
Cost of cards sold ______________
Ending inventory _______________

This is the final piece of information needed to complete your return. Thank you. Mike

[epatmythes]

Thank you for this response, this is the easiest one to understand in the entire thread so hopefully the information is legitimate haha. Just wanna run an overly-simplified hypothetical by you that hopefully you (or anybody else with knowledge) can answer. Let's say I spent 20k on cards in 2020. I sold 15k in cards, but am holding approximately 10k that I will sell at a later date. Would I then be able to report a loss of 5k on my taxes for 2020?

No, you would report a $5K profit.

Your starting inventory was $20K. Your ending inventory is $10K.

Your sales were $15K.

Sales ($15K) - Inventory Removed ($10K) = $5K PROFIT

[Ericc5Bears]

No, you would report a $5K profit.

Your starting inventory was $20K. Your ending inventory is $10K.

Your sales were $15K.

Sales ($15K) - Inventory Removed ($10K) = $5K PROFIT

Got it thanks, can see how this can get very tricky very fast due to the value of cards being so hard to define, seems like a nightmare situation for a CPA lol

[Dame]

No, you would report a $5K profit.

Your starting inventory was $20K. Your ending inventory is $10K.

Your sales were $15K.

Sales ($15K) - Inventory Removed ($10K) = $5K PROFIT

Regarding inventory. How does one determine that, considering the market is volatile and it can go up...way up overnight and down, vice versa.

[epatmythes]

Regarding inventory. How does one determine that, considering the market is volatile and it can go up...way up overnight and down, vice versa.Inventory has nothing to do with market value/volatility.

Inventory is 100% your cost.

It doesn't matter if your card is worth $10 today, or $100. If you bought it 2 years ago for $25, your inventory cost is $25... that never changes.

Sent from my SM-A505U using Tapatalk

[The Losing Edge]

Also of note, you can apply for a state resale license, and with that, you can file it with eBay and stop paying sales tax on your purchases there! That's been a 6% savings for me as most, if not all, of my eBay buying at this point is singles intended for grading (and then resell).

For ebay, what do they want you to submit to show you are a reseller and legit business? I am in Illinois and have setup my LLC with state and feds. I called the Illinois department of revenue to ask about that and they more or less made it seem like i already had the info and needed to ask ebay what they wanted for this. I found the tax exemptions page on ebay. It just says Tax exemption certificate and not sure what qualifies as that.
Wondering this about Panini and Topps website too. Can you submit something to them as well to waive sales tax?

Sorry i know youre in Michigan and not IL but figured you might be of some help if not complete help.

[epatmythes]

For ebay, what do they want you to submit to show you are a reseller and legit business? I am in Illinois and have setup my LLC with state and feds. I called the Illinois department of revenue to ask about that and they more or less made it seem like i already had the info and needed to ask ebay what they wanted for this. I found the tax exemptions page on ebay but just unsure what to submit to them.
Wondering this about Panini and Topps website too. Can you submit something to them as well to waive sales tax?

Sorry i know youre in Michigan and not IL but figured you might be of some help if not complete help.Before Michigan, i was in Illinois and had an LLC there as well. You should have an official resale certificate from the state. That should have the info you need, or just need to upload a copy of that.

Sent from my SM-A505U using Tapatalk

[Dame]

Inventory has nothing to do with market value/volatility.

Inventory is 100% your cost.

It doesn't matter if your card is worth $10 today, or $100. If you bought it 2 years ago for $25, your inventory cost is $25... that never changes.

Sent from my SM-A505U using Tapatalk

Ah, that make sense.

[The Losing Edge]

Before Michigan, i was in Illinois and had an LLC there as well. You should have an official resale certificate from the state. That should have the info you need, or just need to upload a copy of that.

Sent from my SM-A505U using Tapatalk

Ok, yea so I applied for the Reg-1 and they sent me a certificate that looks like something you'd cut out and post on a wall. Assuming this is what you and the employee I spoke with on the phone are referencing. Appreciate the help.

[Justin7]

It's well worth your time to contact a real CPA and have them set you on the right path for taxes. It's a lot of work to track everything but must be done for many.

[ninjacookies]

Bitcoin and alts > kards.


That's my ROI equation.

[smanzari]

Nvm- misread