- Dealers: The bottom-line with dealers is they have to make a profit and have absolutely no motivation to pay you top dollar. When you buy you are their best friend. When it comes time to sell…well, you already know the answer to that one don’t you? Most dealers do not have the financial ability to make large purchases and will try to ‘cherry pick’ your collection. Unless you are unusually up-to-date on values, odds are you are not going to know how much your collection is worth and you will sell too low. Dealers have connections and buyers you will never know about, but again they have to make a profit and it’s usually in the 50% or better level. Another problem with dealers is they want to buy a few high-dollar pieces, sell those and then come back over and over to ‘pick’ your collection clean of all the ‘good stuff’. What it amounts to is you financing the sale each time the dealer returns.
- Auction houses: This can be the absolutely worst method of liquidation possible because of poor listings, lack of knowledge by the auction house employees about medical items, grouping of smaller items under one bid for their convenience, low attendance at the auction, poor timing, low-ball starting prices. And worst, they charge you a high price and then turn your sale results over to the IRS. Yes, individual, well-known medical objects, or surgical sets can do well at auction, but large numbers of obscure medical items bring next to nothing at auction.
- eBay: If you have sold on eBay or have a friend who will do it for you, this is an interesting way to sell everything in your closet, especially the smaller or less valuable items, but don’t think it’s easy for rare or high-dollar esoteric medical items. It is not. Consult anyone who deals on-line via eBay and they will clue you in on the problems, costs, and dangers of being in the on-line auction business…that is unless they are asking to sell your collection for you at a commission! EBay stores located in your community might work for small low value items, but forget the big stuff or expensive items you need to get sold for top dollar. It's not likely to work. They absolutely do not have the medical or antique expertise to pull it off.
- Museum Donation: Yes, you can go this route and achieve the satisfaction of having your name on a display (which, by the way, is not guaranteed by the museum) or getting a write-off for IRS purposes. In case you didn’t know, most museums do not carefully store your gifts and may sell them if they need to raise cash to make another purchase. Smaller, specialized museums frequently go out of business and sell everything in the museum. They always want for you to ‘donate’, not for them to ‘buy’ your collection. All you get is a letter to document you made the donation. If you have the right tax situation and capital gains income this option can work. If you don’t, you end up with a nice letter you cannot use to pay your taxes, CPA, attorney, or for when you need that angioplasty. The Art and Collectibles Capital Gains Tax Treatment Parity Act (S. 374) sponsored by Senator Pete Domenici (R-NM) and Charles Schumer (D-NY) would "provide the same capital gains treatment for art and collectibles as for other investment property." Currently the capital gains tax rate for art and collectibles is 28%, compared to 15% for other types of investments. (As of Dec. 2, 2008)
- Selling to another collector: This can be one of the quickest and most satisfying methods to pass on your collection. You most likely will know the buyer, you can dictate the price, and odds are it’s going to be a private sale with you and your CPA controlling the terms and taxes. The best part: it is quick money all at once or made in structured payments without commissions going to auction houses and dealers. Individual collector-to-collector sales are about trust and reservation, not a middleman taking a cut of the proceeds.
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About Dr. Michael Echols