First Right Side Up Jenny Souvenir Sheet Auction For $45,000

Some recent comments regarding this sale and the upright issue from Chad Snee at Linn's.

http://linns.com/news/editorial-ins...-speculation

Course27, If I read that article correctly , that couple spent$36,000 on Jenny sheets in hopes of getting one of the upright sheets. Wow !

Let's just say that it was a bad idea.
Tom

A very bad idea. Sheet sold for $45,000. Consignment fee is 10%, so net is $40,500. Then there's capital gains taxes, which are short term so the rate is regular income tax rate.

For simplicity's sake, let's assume 28%. The problem is that the gain is not 40,500-36,000 (the cost of all of the sheets), but 40,500-12 (the cost of the sheet that actually sold). Taxes are over $11000.

The couple might have lost over $6500.

Of course, this is all speculation. I don't know if the consignment fee applies, nor is the exact capital gains tax known.

I have bought a number of the sheets - but use the stamps on mailings regularly, as my certified envelope postal fee comes to exactly $4.00. So what do I do? I put one right-side-up and the other upside-down (or is it the other way around...?).

Maybe I'll get lucky - but I'm not counting on it - just having fun affixing them to the envelopes!

Cheers.

PS - bankruptcollector - and that is assuming the consignment fee was only 10%! Also, they have the other 1000's of sheetlets they can probably sell at 80% - 90% of face, so they aren't a complete loss (hahahahaha...)

The couple still has $36,000 (actually, $35,988) in postage. Sold at 75% of face, that's $27,000 back in the pocket.

Siegel guaranteed the consignor of the first Jenny Unvert would get at least $30,000 and 0% consignment fee. There was an ad in Linn's a few months ago.

Robert

Edit: Found the ad and corrected post.

Trainwreck and orstampman - I did not know of the 0% consignment fee. That increases taxes by about $1000, but they save $4500. They still lose $3000 unless they can sell the other sheets. Can't flood the market now, so I guestimate 65-75% face. Certainly a good chunk of change, if the couple can sell them all.

They may even be able to declare a capital loss up to $3000 per year. Hmmm, $12 *.3 = average loss per sheet, times 3060, carry the 1 ...

Maybe the couple has a LOT of packages to mail.

Too much like a business...

You know, if we really want the USPS to stop doing this kind of stuff, we really need to stop buying it. As long as there are fools out there willing to go chase this stuff down, then they'll keep printing it.

Why is this issuance a problem? You don't have to buy it if you don't want to. All those other "real philatelic" items at the Siegel auction were freely available for sale. Bid on them if you think that they have value. Somebody wanted to buy this. Was their purchase wise? Only time will tell. The fact that the USPS is trying to be creative and generate interest in "collecting" is a good thing in my view. How many comments have I read on various stamp boards bemoaning the fact that the hobby is dying. So this promotion is somehow driving a bigger stake in the heart of the hobby??

Anybody who uses a stamp on a letter or a package is doing the hobby a favor. I hope that the news gets out and creates a rush of people to buy more Jennys at their post office. Is it a gimmick... yeah. The Farleys were a gimmick too. Those are collectable now right?

Bob

I am more in the camp of bobplates on this. I have been to multiple Post Offices, and the clerks are clearly aware of the scarcer "printed right side up" sheets. A couple of them have told me of "friends" that would be very interested in purchasing one of them if I get one. One of the Post Offices told me that soon after they ran out of their supply, 5 people came in the next day asking about them, so they ordered more.

Yes, a gimmick. But, attracting more interest in the stamps, even if maybe casual "investors". We might get some more converts yet!

I buy them for work to see if I'll get lucky. Boss figured out heat I was doing so now he buys the stamps...rrrrrrr
Way to be a fun sucker

bankruptcollector,

A loss can't be claimed for the 'normal' sheets if they're still in their possession. They still have value and would have to be sold to establish a loss. There's virtually no way they would ever become totally worthless, and therefore be a total loss. For any panes used as postage, there is no loss. If they're sold as discount postage, the loss would be the difference between price paid and net sale proceeds. However, IIRC, there are restrictions on what losses you can claim for hobby activity.

Understood, philatomic. Gains or loss can only be declared upon sale, subject to hobby rules.

Another possibility. Donation to charity may qualify as a tax deduction. Still a real loss, though.

The gain on the unvert will be $45,000-$12 = $44,988. The other $35,988 in regular sheets could be immediately sold to a postage dealer at 70% of face = $25,192 (these are very popular and my guess is someone would pay that high a percentage, even for quantities like that.)

That gives them a loss of $10,796 on the balance, which would offset the gain of $44,988 on the unvert and leave a net profit of $34,192 on this cool little speculative investment.

Tax (capital gains - as a collectible at 28%) on the $34,192 profit would be $9,574. Total proceeds = $70,192 ($45,000 + $25,192), costs = $36,000, taxes = $9,574.

That leaves them with an extra $24,618 in their pockets (after taxes) - not too shabby! I find it hard to envision any way they could lose money on this...even if they had some odd/weird tax situation that would remove them from the "ordinary Joe" scenario & reasonable assumptions I used above.