I think the show Billions had an episode where the guy ran this scam.
Yeah, I’m more interested in process-optimizing AI, autonomous driving, supply-chain improvements, etc.
Related to investing and cards:
I pulled out my “valuable” baseball cards from my youth to show the kid, and looked up some values. They’re all basically worth less than they were when I was a kid. McGwire '85 Topps worth like $50 for example.
Then I thought I should look up all these old Magic the Gathering cards. I didn’t sink as much into it as my friends that had moxes and whatever, but I have a lot of dual lands and stuff like Mana Drains. And they’re all worth hundreds now.
STONKS.
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I’ve got more of a don’t hate the player, hate the game feeling about this one.
This is the kind of bullshit that a well staffed IRS would be able to cut through. Maybe you can’t get them for fraud, but at least you can get them to pay up. Just get a couple of art appraisers to verify. Or maybe not even that. I’ve heard of people getting their charitable contribution values reduced by the IRS for no reasoning at all.
Example: Uncle donated a very gently used couch to his church so they could sell it as some sort of event they were having. He got audited, and so they went through everything, so this came up. Uncle is anal AF and had receipts, including:
- Receipt for original purchase (1k)
- Photo showing condition
- One contemporaneous craigslist ad showing same couch but older sold for $200
He claimed $100, and IRS said lolno, contribution is worth zero.
And that was apparently the only thing they found wrong on his entire tax return.
The appraisal charade is an absolute joke. Why does the taxpayer get to pick the appraiser? They all know the ballgame.
Well it’s not practical for the IRS to select an appraiser for every charitable contribution. I think self reporting plus aggressive auditing of anything that looks even a bit suspicious is a better way to go.
Whew! Thank god the IRS is going after scammers like your Uncle and not those law abiding, tax paying billionaires that would NEVER try to cheat on their taxes!
I don’t understand this discussion at all. If the donator gets to record a deduction for the fair market value of the donated item, why not force them to recognize a capital gain for the appreciation? You want to record an inflated value for the donated item? Great, you get the deduction, but also a big taxable gain. No need for additional IRS effort in appraising things.
Sorry, I’m talking about something different even though I didn’t say so at all, which is the appraisal of private business interests upon transfer or death. There are totally standard tactics around gifting/selling/inheriting minority ownership interests that allow mega rich people to avoid a huge percentage of the estate tax.
Oh, yes, definitely this.
Because that would be inconsistent with how similar things are handled.
For example, as I’m sure you know, you can donate appreciated stock and you don’t get the hit for the CG. Why should other investments be different?
I guess you could be advocating for just changing the whole system. I’d be against that for selfish reasons (all my charitable contributions are appreciated stonks), but I suppose I’m persuadable.
I am absolutely in favor of requiring gain recognition for cappreciated items of all types. I mean, what’s the argument against?
I wasn’t certain about that from your prior post, but now that you’ve clarified, I’ll admit that there is no consistency problem with your position.
I’m don’t really have much problem with your stance, but let’s just play it out.
Here’s one argument: If you gave away the appreciated asset, then you really didn’t have a gain in any meaningful way. It’s basically a gain that is not realized. Would you have other unrealized gains taxed?
If the taxable gains are coupled with equal (greater!) current period deductions that would more than offset them, sure.
That is, the general tendency to not tax unrealized gains is not because it’s economically inappropriate. (Lots of people in this forum are in favor of a wealth tax.) It’s that taxpayers are less likely to have the capacity to pay taxes on unrealized gains - think of the farmers with their appreciated farmland! You don’t want the taxation of unrealized gains to lead to the forced sale of the asset. But in this case, that’s mechanically not an issue because the tax hit is perfectly offset by the deduction, and the change in ownership has already taken place.
Nobody, and I mean nobody, has been more relentlessly, incorrectly used to justify bad policy than farmers. You know what? Fuck farmers. If you can’t make money at it, sell the damn farm to someone more efficient. If you can, congrats, pay some fucking taxes because god knows you aren’t shy about sucking off that sweet government teat.
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I guess there is nothing inherently wrong with that approach. You would have to have some sort of provision to handle cases where you don’t have offsetting current period deductions otherwise you run into a version of the farmer’s problem.
Perhaps the only “problem” is that charities will get less money, but it’s not clear how much of a “problem” that actually is.
Aren’t we talking about gains that are (in my world) being taxed precisely because they are donations and therefore generate current period deductions? Maybe I’m misunderstanding the scenario.
I think I may have misunderstood what you meant. But I think I get it now, so you can disregard that.
This is tame. The big tax shelter the IRS is fighting against a lot today works like this:
- Buy some hunting land or something in the middle of nowhere.
- Donate an easement to some bogus 501(c)(3) that prevents you from using the land for anything other than hunting.
- Get some appraiser to say that the land was worth a billion dollars for residential development, but is worthless subject to the easement.
- Take a billion dollar tax deduction.
JFC