opening a store question > (accountants ???)

My question:
If i own a TON of cards at my house; and want to open a storefront -
do i "give" them to the store;
or do i "sell" them to the store?

> Thanks in advance ...

no thoughts?

need more details

what kind of store front? online?

For purposes of minimizing your taxes for the store -- Sell.

You want to have a cost basis in the cards so it's not all pure profit.

In fact, you want to sell them relatively highly.

However, you have to be careful about the implications of the personal taxes.


This is neither legal nor accounting advice. Just chatting on a message board. You get what you pay for. No attorney client privilege has attached.

Jeff N. said:

For purposes of minimizing your taxes for the store -- Sell.

You want to have a cost basis in the cards so it's not all pure profit.

In fact, you want to sell them relatively highly.

However, you have to be careful about the implications of the personal taxes.


This is neither legal nor accounting advice. Just chatting on a message board. You get what you pay for. No attorney client privilege has attached.

Click to expand...

Jeff, i think you should end all of your posts with this quote, regardless of topic

Either one (but let's say brick-&-mortar for now) ... just trying to decide if it's best to get a License & Fictional Name (like Cards, Inc.) - then "sell" my cards to the company for $1000 or whatever; - that way if they ar robbed, or if they are bankrupt, at least I got paid for my personal investment ... ???

cmixer said:

Either one (but let's say brick-&-mortar for now) ... just trying to decide if it's best to get a License & Fictional Name (like Cards, Inc.) - then "sell" my cards to the company for $1000 or whatever; - that way if they ar robbed, or if they are bankrupt, at least I got paid for my personal investment ... ???

Click to expand...

So, you are trying to start a company to protect your personal assets?

Sounds like a shady operation to me.

Where is the start-up capital coming from to purchase your collection to sell?

I am sure who ever would review your books would strongly question you, as the store owner, purchasing merchandise for your store, from yourself.

LOL - thanks so far ... this is exactly what i need to know ...

Just for fun, let's assume a bank gives "CARDS INC" a business loan;
normally they would have to buy their stock/supply from somewhere, so why not me?

Hey Gilmore, you may wanna make sure & save this thread for future use when the IRS requests/subpoena's a copy of this for proof against Cmixer & his insurance/bank loan scam... :lol:

HoustonTeams4Me said:

Hey Gilmore, you may wanna make sure & save this thread for future use when the IRS requests/subpoena's a copy of this for proof against Cmixer & his insurance/bank loan scam... :lol:

Click to expand...

that is clearly not his intention


Chris is smart enough to look before he leaps, and isn't one to scam anyone.

cgilmo said:

HoustonTeams4Me said:

Hey Gilmore, you may wanna make sure & save this thread for future use when the IRS requests/subpoena's a copy of this for proof against Cmixer & his insurance/bank loan scam... :lol:

Click to expand...

that is clearly not his intention


Chris is smart enough to look before he leaps, and isn't one to scam anyone.

Click to expand...

^ awww ...
My brainwashing is working ...

you can make a personal loan(as in cards/inventory) to Card's inc. Just keep it on the books and once in a while pay yourself back some of the loan amount

thanks all - i look forward to any other responses - - -

So, you are trying to start a company to protect your personal assets?

Click to expand...

That's like the number one added benefit of incorporation, dude. No one wants their house seized because the chicken-beheading business didn't turn out that well.

With that said, there's a craptonne of costs associated with doing it that way, and unless your ferrr reallzzz -- I'd gameplan the whole thing.

With that said, you probably want to cleverly sell yourself the cards at a price that'll roughly allow you to sell 33% of 'em and claim the rest.

It'll eat your pocket book for a couple years, so maximize your write-offs before you start making money (in five years, if you're lucky).

If you wanna get dirty-dirty, may I suggest donating the cards to a friend that'll have no problem claiming the extra 20K on his return (plus a nice little incentive) and maybe..

possibly..

sorta..

purchasing them from him.

The answer would depend on the type of entity you form to run the cardshop business. If you're running it as a sole proprietorship then there is no distinction between you and the business, so you can't give or sell yourself anything (at least not for tax purposes).

If you're incorporating, then contributions in exchange for shares qualify for non-recognition of gain as long as you control 80% of the shares. If you were the sole shareholder of the corporation then obviously you would meet this requirement. That may be undesirable though, because it would basically result in the corporation paying tax on the difference between the eventual sale price of any cards and whatever price you had paid for the cards. The cards would be inventory in the hands of the corporation, so that amount would be taxed as ordinary income to the corporation- most likely at a higher rate than your personal rate, depending on what your personal income is.

If you sold the cards to the corporation and wanted to do everything by the books, you would have to pay tax in the year you started the business based on the difference between the sale price you received and whatever you had paid for the cards. The advantages would be that you may be able to pay a lower capital gain tax than the corporation would pay under the first scenario, and the corporation would not have to pay tax when it sold the cards, assuming they were sold for the same value it had paid to you. The disadvantage would be that you'd need the cash for the tax bill before your business had made much money and distributed it to you.