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.

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  • 3 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.

  • 4 weeks 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.

  • 4 weeks ago

    The cost basis is basically the value at the time of the trade.

  • DIEGO.
    Lv 7
    4 weeks ago

    this is a good question!

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  • Judy
    Lv 7
    4 weeks 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.

  • 4 weeks 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.

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