Francetic Tax Resolution LLC - March 2021

MARCH 2021

262-752-6992

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WHAT WOULD YOU BUY WITH $5.2 MILLION?

My Peek Into the Crazy World of Baseball Card Collecting

Two months ago, I saw an internet headline that a 1952 Mint 9 Mantle card — a rare baseball card commemorating player Mickey Mantle — had broken a world record. The card sold at an auction on Jan. 13 for a whopping $5.2 million! My first thought reading the headline was, “Dang, if only I’d known baseball cards would get this big, I wouldn’t have liquidated my collection 10 years ago.” My second thought was, “Why didn’t I buy one of those Mantle cards back in the ‘70s?” I remember striving to save up for that very card. It just cost a couple thousand bucks. If I’d stuck to it, I could have been a millionaire! The world of baseball card collecting has always intrigued me. When I was a kid in the 1970s, I used to walk a few blocks to the local supermarket with quarters jingling in my pockets and baseball on my mind. When I got there, I’d swap my coins for a pack of 12–15 cards and the gum that came with them. I can’t think about baseball cards these days without remembering the taste of that gum — it was just like cardboard! The flavor lasted about 20 seconds, but the excitement of the cards stuck around for a lifetime. I collected baseball, football, hockey, and basketball cards steadily through high school and beyond. My older brother was into it, too, and when we got more serious than the folks at the corner store, we started driving up north to see Larry Fritsch at Larry Fritsch Cards in Stevens Point, Wisconsin. Larry opened his store on May 1, 1970, and he was the first dealer in the whole country to put together full sets of cards directly from the manufacturer. At Larry’s place, you could buy complete sets for each year for the four major sports. I can still remember the day when my brother bought a case of 12,000 random baseball cards from 1978. I spent the next week sorting them into complete sets all over our mother’s dining room table. It was quite an operation! When the hobby finally tapered off in my 20s, I had close to 60,000 cards. I still bought some cards from time to time, but I packed the majority of them away into about 20 heavy boxes and stuffed them into a couple closets in my house. I sat on those cards until 2010, when my then-wife decided we could use some more closet space. Then came the moment I now regret: I sold the whole lot to a friend and watched him cart them away. Today, I only have about 50 sentimental cards left, including two for my favorite players: Johnny Bench and Pete Rose.

If I’d know this pandemic was coming, I might have done things differently. Baseball cards really took off last year when everyone was stuck at home. The Mantle card that sold this January broke a record set just five months before, when an autographed 2009 Bowman Chrome Draft Prospects Superfractor card of Mike Trout sold at auction for $3.93 million. Before that, a T206 Honus Wagner card that sold in 2016 for $3.12 million had the crown. When the Mantle cards came out in 1952, you could buy a pack for 5 cents. It’s crazy to think that a card worth a fraction of a cent back then could be sold for multiple houses today, but that’s just the way it is with collectibles. They’re so valuable that they even have their own tax rules (read more about that on Page 3). Do you collect baseball cards? If you do, let me know the next time you reach out with a tax question or point a friend or relative my way. I’m always happy to reminisce about my old hobby. Paul Francetic

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ARE MICRO-INVESTING APPS A GOOD WAY TO BUILD WEALTH? EXAMINING THE PROS AND CONS

PROS

To outside observers — and probably quite a few people within — the world of investing is overwhelming. Nevertheless, common wisdom dictates that building investments, whether as part of a retirement plan or for other reasons, is an indisputably good thing, but it’s hard to figure out where to begin. Could micro-investing apps be a good place to start? WHAT IS A MICRO-INVESTING APP? Micro-investing apps, such as Acorns and Stash, allow users to invest small amounts of money in the market. Many of these apps will round up purchases made with a debit or credit card to the nearest dollar amount, then invest the difference in your portfolio. Other apps, like Clink, will encourage users to invest $1 per day.

a mutual fund with a 1% expense ratio, which would amount to a dollar per year. If you invest with Acorns or Stash, you’re paying at least $12 per year because of the flat $1 per month fee. That’s a 12% expense ratio, which is not great. And at the end of the day, micro-investing might be easy, but the fees and minimal investment amounts lead to mere micro-gains. So, if you’re looking for a way to familiarize yourself with the market and figure out how it works, micro-investment apps might be a good place to start. However, if you want to retire on your investments one day, then it might be best to invest somewhere that will net higher returns.

Most investing apps are incredibly user-friendly and require very little oversight. They offer tutorials on how to invest, give users some basic knowledge of financial markets, and make it easy to view your portfolio. The cost of the initial deposit is usually very affordable too, with Acorns starting at $5, Clink starting at $1, and Stash starting at just 1 cent. On top of that, the subscription fees are also very affordable, usually only costing users a few dollars every month. CONS As affordable as those monthly fees are, they can easily lead to a less-than-favorable expense ratio. For example, say you invested $100 in

SO, WE’VE RESOLVED YOUR TAX PROBLEM. NOW WHAT?

Meet Financial Representative Jonathan Nelson

Let me paint a picture for you. After weeks or months of working together, we’ve finally resolved your tax issue! Maybe we set you up with a payment plan with the IRS or wiped the slate totally clean. Either way, you want to get your finances back in order. So, what do you do now? When I have clients in this situation, I recommend sitting down with a financial representative like Jonathan Nelson, who has his own company in Racine called J. Nelson Financial Services. He helps people with investing, financial planning, college savings, retirement planning, and life insurance policies. When one of my clients needs financial help or wants to find out how contributing to an IRA can reduce their tax burden, he’s my go-to guy. “I have been in the business for about eight years,” Jonathan says, adding, “Often, my time is spent helping people with budget planning and getting things sorted out so they can do some future investing. I even do a lot of work with people who have lost a loved one and now need help processing all that stuff, getting their money, and getting the claims processed.”

One of the best things about Jonathan’s business model is you can get his expert advice for free. He makes his money by helping people like you find the right insurance company or investment account. Then, if you like the service enough to sign up, that company pays Jonathan. You get his valuable tips and perspective at no charge, which is great for people who don’t have time to learn about the whole financial system. “We all have areas in our lives that we are really, really, really good at. People should remember to focus on what they’re good at and what they like to do and get professional help for things they aren’t good at or don't really like to do,” Jonathan says. Jonathan is licensed to practice financial planning in Wisconsin and eight other states and can give advice to anyone. My clients have loved working with him and vice versa. To get in touch with Jonathan, you can email him at Jonathan.Nelson@MWArep.org, call 262‑221‑8299, or visit JNelsonFS.com.

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SELLING COLLECTIBLES? DON’T FORGET ABOUT THE CAPITAL GAINS TAX FTR TAX TIP OF THE MONTH

ENGLISH GROUND BEEF PASTIES

As I mentioned on Page 1, collecting sports cards surged in popularity in 2020 when people turned to the hobby for its investment potential. These cards can be real moneymakers. But if you’ve bought sports cards specifically to earn money on future sales, it’s important to take the collectibles capital gains tax rate into consideration. That rate can be up to 28%. Yes, you read that right! It’s a maximum much higher than the normal rates of 0%, 15%, and 20% for the sales of securities like stocks and bonds. According to the IRS, collectibles include works of art, rugs, antiques, metals (such as gold, silver, and platinum bullion), gems, stamps, coins, alcoholic beverages, and some other tangible properties, including sports cards. Something is considered a collectible if it carries additional value based on its rarity and market demand. Essentially, the value of your collection is determined by the opinions of collectors and experts who might buy it. The amount of collectibles capital gains tax you’ll have to pay is based on your income tax rate. For example, let’s say you’re married filing jointly and have $100,000 of taxable income after taking your deduction. In that scenario, you’re in the 22% income tax bracket. That means if you sell a collection of sports cards you’ve held for 20 years for $50,000 more than you paid for it, you’ll pay 22% on that gain. As I said above, the maximum long-term capital gains rate you can be asked to pay on a collectible sale is 28%, even if you’re in the top tax bracket. If you still have questions about the capital gains tax on collectibles, reach out to me and I’ll walk you through it. One last thing to keep in mind is that collectibles receive what is called “a step-up in basis” on the date of death of the holder. That means when you die, the fair market value for your collectible at the time of your death becomes the basis for its value. If you are holding on to a mint 1952 Topps Mickey Mantle baseball card like the one I referenced on Page 1, you might want to think about willing it to an heir. Then, they can sell the card using the stepped-up basis and may pay little to no tax on the sale, depending on when it is sold.

Inspired by AllRecipes.com

INGREDIENTS

• • •

3/4 lb ground beef

• • •

1 tsp dried parsley

1 medium onion, diced 2 medium potatoes, peeled and diced 2 sheets store-bought puff pastry dough

Salt and pepper, to taste

1/4 cup beef broth (as needed)

DIRECTIONS

1. Preheat your oven to 400 F and line a baking sheet with parchment paper. 2. In a large bowl, combine the beef, onion, and potatoes. 3. Roll out the pastry dough into roughly 10-inch circles or squares. 4. Spoon 1/2 of the beef mixture onto each sheet of dough, then top the mixture with parsley, salt, and pepper. 5. Fold the edges of the dough over the filling, pinching each pasty shut and tucking in both ends. 6. Transfer the pasties to the prepared baking sheet, then cut several small slits in each pasty for ventilation. Bake for 45 minutes. 7. Remove the pasties from the oven and reduce the heat to 350 F. Spoon 1 tsp beef broth into each slit, then bake for an additional 15 minutes. 8. Serve and enjoy!

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PRST STD US POSTAGE PAID BOISE, ID PERMIT 411

5429 DEERFIELD ROAD MOUNT PLEASANT, WI 53406-1919

WWW.FRANCETICTAXRESOLUTION.COM | 262-752-6992

INSIDE

RETURNSERVICE REQUESTED

Listen to Paul Saturday mornings at 7 a.m. on channel 1050 WLIP-AM or stream online at WLIP.com!

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The Story of the $5.2 Million Baseball Card The Pros and Cons of Micro- Investing So, We’ve Resolved Your Tax Problem. Now What? March Tax Tip English Ground Beef Pasties

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A Match Made in Cornmeal Batter Heaven

CORN DOGS AND BASKETBALL

It’s no coincidence that National Corn Dog Day is March 20 — the third Saturday of the month. This day is traditionally the first Saturday of March Madness, otherwise known as the NCAA Men's Division I Basketball Championship. But wait. What do corn dogs and a basketball tournament have to do with one another? Turns out, National Corn Dog Day has everything to do with March Madness. The “holiday” began in March 1992 when two Corvallis, Oregon, high school students needed a snack while watching a basketball game. They got some corn dogs and called it good. But somehow, this simple snack and sport pairing turned into something huge. In fact, eating corn dogs while watching March Madness caught on like wildfire — and the teens didn’t even have Instagram to promote it! Though it’s not clear how, it spread across Oregon and eventually the rest of the country. It’s likely that people just heard about it from friends and family and thought it was a great idea.

with the idea of fried foods on a stick. They battered and fried everything from cheese to bananas, but it was the battered sausages that really stood out, and the corn dog was born. By the 1940s, the convenient creation had popped up at state fairs and drive-in restaurants all over the country. In 2012, in honor of the original Corn Dog Day, the then-governor of Oregon issued an official proclamation naming March 17 National Corn Dog Day in the state. Several companies jumped on the bandwagon as well, including Foster Farms (a maker of frozen corn dogs, among many other meat products) and the Pabst Brewing Company. While it’s not an “official” national day recognized by the U.S. Congress, it’s celebrated with thousands of events every March. And it’s grown beyond its U.S. roots. An article printed in The Oregonian in 2009 revealed that National Corn Dog Day parties have been celebrated on nearly every continent — including Antarctica!

The corn dog, like basketball, is an American creation. In the 1920s, the creators toyed around

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