Terms of a deal for my Trophy Pikachu

I agree because I like data but it is not surprising the fact that this is rare to see. Hopefully the IRS and the buyers customs agents don’t have presence on e4. I don’t think there are any exchanges that you could transfer this much BTC to USD without a 1099 though so that probably isn’t relevant for this one.

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It makes sense why the buyer is using bitcoin, it allows them to pay with capital that they have never had to pay gains/income taxes on, and as a seller you can opt to keep the payment in crypto in hopes of the coin value rising over today’s price point. The US recently made it that anytime you convert crypto to USD, you will get hit with a tax form.

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Congrats! Huge deal, wow

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Fedex Overnight, you’ll both be fine - don’t worry.

great transaction, congrats to both parties!

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Very exciting only part I don’t understand is why does the deal have to wait until you convert the BTC to USD? Once you recieved the 200k in BTC wouldn’t it then be paid for in a safe way that the money couldn’t be taken back?

Yeah I was curious about that as well.

Once it has enough confirmations, there is no turning back. You have it. I would have probably sent this to a wallet off coinbase, but I get why someone would do it that way.

Technically it’s a taxable event when the transaction is made, and then another if the BTC gained in value before converting. But that’s impossible to really prove, so the taxable event would essentially be once the BTC is converted to USD.

BTC is volatile, he wants $200k USD, Link wants to pay in BTC. If EBulb gets $200k worth of BTC and the price shifts 15% while tx is going through or before he has a chance to sell he doesn’t want to be on the hook for that

I had a feeling it was for that reason, I’m sure the conversion fees also play a part. I think they are around 5-10% right?

But honestly. If I had the Bitcoin. I’d pay a premium knowing that I was “spending it” without actually “spending it/converting it” if you catch my drift

:joy:

Nah depends on the exchange but usually not more than 0.2% (although Coinbase will be on the higher end, non coinbase-pro may be slightly more than that).

He has sold the BTC for coinbase USD balance, we are just waiting for confirmation that he can withdraw it (should be 1-2 more days) and then he will be sending the card :blush:

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It cost around $3000 to sell it, which I covered (actually, BTC rose after I sent the 200k which covered the fees almost exactly lol).

It isn’t just when converting to USD. In the US at least if you trade BTC for something at a higher USD valuation than you paid for it (or spent to mine it) then you owe tax on that gain amount. I’ve looked into it because I own some BTC though regrettably a lot less than I could have. I also involved some in a Pokemon trade back in 2017.

Obviously though the IRS doesn’t have any way of knowing if BTC is traded for a Pokemon card and vice versa. If one were to trade a Pokemon card for a house (I can’t wait to read to forum post when that first becomes a thing) the same would apply. The government always likes to get a piece of the action.

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Yep^

Anytime the btc trades hands it’s really a taxable event. Even if you use it to preload a crypto debit card and buy coffee. It’s just really hard to chase that stuff down. Which is why I think we start to see more of these, for people wanting to diversify out of crypto into something easier to convert to cash.

For what it’s worth, I have absolutely no interest in avoiding paying taxes.

My understanding is that since I have owned the card for less than a year, any capital gains I am making on this sale would be taxed as income for 2020 (rather than paying a 28% capital gains long-term collectibles tax).

When I purchased the Trophy Pikachu for $86.5k earlier this year, it was through a bank wire transfer and there was a memo in the transaction that it was for the purchase of a Trophy Pikachu.

There was no note/memo for what the transfer of the $200k in bitcoin was for. I am simply planning to withdraw it all and then pay the taxes owed on the $113.5k of extra income.

I will be getting an accountant in early 2021 and discussing all of this with that person, of course.

But in the meanwhile if anyone has any advice, I’m all ears.

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Sorry if any of us seemed to imply that.

I could tell that you were planing on paying taxes just by the way you structured the transaction. There are certainly ways to circumvent it, that will likely be closed in the future. But this is such a cool transaction. It’s exciting to see the advances in technology and payments.

@hyruleguardian I’m not sure if you’ve already though of it, but my only thought would be to strategically take some of the PWCC money out in 2021 tax year vs. taking everything out in 2020. (You’ll likely have to take some out in 2021 for the later Dec auctions and any unpaid items that move to January and beyond). I am quite sure the money from your PWCC sales would be taxable the day the check hits your bank not the day the eBay auctions end because obviously an eBay auction ending doesn’t mean a sale actually happens or gets paid.

A hypothetical example of savings would be the following:

$1M taxable in one year as a single filer. $481.6k gets hit with the highest 37% federal rate.

Taking $500k in 2020 and then 500k in 2021 you’d keep everything under the 35% threshold and save 2% (over $9,000) in federal taxes alone without having done anything illegal. Business will frequently do things around year end such as delay sending invoices to their customers during a big year or making large business purchases or prepaying supplier invoices etc. for the following year.

In any event I’d love to have a year where I owe hundreds of thousands of dollars in taxes and congratulations.

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And that is the only thing I know about that show.

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@gottaketchumall , Trophy Pikachu and a few other things aside, the vast majority of what I’ve sold are collectibles that I’ve held for the long-term (defined as holding the items for more than 1 year, as far as I can tell).

As far as I can tell, all of those items would be taxed at a flat-rate of 28% on capital gains.

So for those cards, it should not matter whether the money is received in 2020 or 2021.

Please correct me if that’s wrong.

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@hyruleguardian ah that is a good point. I am thinking more for the way I am operating tax wise as a business with inventory being inventory regardless how long it is held but long term capital gains would be better for you it seems.

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Feels like yesterday the entire (albeit much smaller) online Pokemon forum community was going bananas over a $10.5k Prerelease Raichu purchase, at the time by far the most expensive *public* sale to date. No one could believe ANY Pokemon card could be worth so much or valued so high by a buyer. Flash forward a decade and here we are. Congratulations to both parties.

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