The Cardboard Casino and Ribbon Snakes
In this edition of the Flying Point Update, we're going to talk about the increasingly unhinged economics of Pokémon cards, what the IRS thinks about your collectibles, and ribbon snakes.
Top of Mind
I recently made the mistake of introducing my 4-year-old, Frank, to my brother's old Pokémon card collection from the 90s. He fell in love with the collection immediately. We took a trip to our local game shop and bought a bunch of bulk common cards for a dime apiece. There was even a good lesson in there about earning money from chores to buy more cards. Frank has spent hours sorting them by color, by "how cool the picture is," and by a classification system I still don't fully understand. It's wonderful. Total parenting win. However, it's also introduced me to the dark and unhinged world of nostalgia-fueled gambling that is the reality of modern Pokémon card collecting.
Naturally, I thought it'd be fun to grab a booster pack or two for Frank. That's when I fell down a rabbit hole I was not prepared for. It turns out the modern Pokémon card market is less "kids' hobby" and more "unregulated derivatives market with a cartoon mascot." I thought packs were hard to come by because Pokémon is so popular with kids. It turns out that scalpers run automated bots to buy out store shelves the instant new sets go live, then relist everything on secondary markets at steep markups, sometimes minutes later. The Pokémon Company reportedly printed somewhere north of 85 billion cards over the past year, and shelves still empty out in seconds. It's apparently enough of a problem that Nintendo's president addressed scalping directly at this year's shareholder meeting.
Then there are the odds. The Pokémon Company doesn't publish official pull rates for its rarest cards; the actual probability of pulling a specific card is closely guarded and gets reverse-engineered by the community, tracking thousands of pack openings to estimate the real numbers. Once you do pull something good, there's a whole professional grading industry built around authenticating it. PSA, the biggest player, is currently sitting on a backlog of roughly 10 million submitted cards, with multi-month wait times, because demand has outpaced their ability to grade fast enough.
And then there are "case breaks," where people pay for a spot in a sealed box that gets opened live on camera, betting their spot lands on the valuable card. It's genuinely popular, it's livestreamed on platforms built for it, and it's currently the subject of actual lawsuits arguing that it amounts to unregulated gambling wearing a hobbyist costume. Singapore just announced it's moving to regulate trading card packs for the same reason.
I had no idea any of this existed. I went in looking for a fun weekend activity for me and my son. I came out the other side having learned more about scarcity marketing and speculative psychology than I ever expected to learn from a trip to the card shop. We're sticking with the dime bin for now.
Worth Knowing
If you, or someone in your household, has gotten swept up in collectibles (cards, coins, sneakers, wine, art, whatever), it's worth knowing how the IRS actually treats gains when you sell.
Collectibles don't get the standard capital gains rates. Under IRC Section 1(h), long-term gains (assets held more than a year) on collectibles are taxed at your ordinary income rate, capped at a maximum of 28%, rather than the 15% or 20% most investors are used to. Sell within a year, and it's ordinary income with no cap at all. The IRS's definition of "collectible" under Section 408(m) is broad, and trading cards, while not explicitly named, are generally treated the same way by most tax professionals. Your basis isn't just what you paid, either; grading fees and authentication costs get added in, which matters if you're ever calculating a gain.
Here's the part people get wrong most often: not receiving a tax form doesn't mean the income isn't taxable. The federal 1099-K reporting threshold for platforms like eBay and PayPal is back up to $20,000 and 200 transactions this year, but the underlying income was always reportable, form or no form. The IRS doesn't need a 1099 to expect the income on your return; the form is just a paper trail that makes it easier for them to notice if you don't. If flipping collectibles becomes a regular, active pursuit rather than an occasional sale, that can also shift things from investment gains into self-employment territory, with different rules entirely.
None of this is new, either. Comic books went through almost exactly this cycle in the 1990s. Marvel's X-Men #1 sold over 8 million copies in 1991, and an entire industry sprang up around treating comics as investments, complete with foil covers and polybagged "collector's editions" meant to be kept sealed. It didn't work. When everyone hoards mint copies of the same issue, scarcity disappears, and so does the value; that same X-Men #1 often sells for only few dollars today, barely above its original $1.50 cover price. The genuinely scarce Golden Age books are still worth real money, because actual scarcity, not manufactured hype, is what holds up over time.
Mark Your Calendar
Nobody wants to think about taxes in the summer. Not even the IRS. The calendar is kind of quiet.
September 15, 2026: Q3 2026 estimated tax payments due. Also, extended partnership and S-corp returns are due.
October 15, 2026: Extended 2025 individual returns due
Maine Wildlife Facts
We get to see the occasional northern ribbon snake around the berry patches in our yard, usually announced by a fair amount of squealing before anyone's actually confirmed what it is.
Ribbon snakes are a slender, non-venomous relatives of the garter snake, and the easiest way to tell them apart is the tail: on a ribbon snake, it makes up close to a third of the total body length, which gives the whole animal a noticeably whippier, more streamlined look than its stockier garter snake cousin. They're marked with three bright yellow or white stripes running the length of a black or brown body, and adults typically run 18 to 26 inches long.
They're diurnal, meaning they're out and about during the day rather than at night, and they're semi-aquatic, sticking close to the edges of ponds, streams, and wet meadows, which lines up with how often ours turn up near the damper corners of the yard. They're fast, agile hunters that chase down frogs, tadpoles, salamanders, and small fish, and they're just as fast when something is chasing them; if a ribbon snake can't out-swim or out-slither a threat, its backup plan is to thrash violently and release a foul-smelling musk on whatever's holding it. Fortunately, none of the FPA naturalists have confirmed that fact.
Ribbon snakes give birth to live young rather than laying eggs, typically in litters that can range anywhere from a handful to more than twenty, born in late summer, right around when we tend to see the most of them. Ribbon snakes are currently listed as a species of special concern in Maine, largely due to wetland habitat loss, so ours get a good look, a lot of noise, and then a quick slither back into the shrubs.
These Maine wildlife facts have been brought to you by Will (8 this weekend!), Frank (4), and Catherine (2), Flying Point Advisors' on-staff naturalists.
Thumbnail photo: Dominic via iNaturalist, CC BY 4.0
Questions about any of this? Just reach out - I read every email and love hearing from you.
Thanks for reading. You'll hear from me again in about two weeks.
- Mike
Disclaimer
The Flying Point Update is provided for general educational and informational purposes only. The content in this newsletter reflects my thoughts and observations on tax, accounting, and financial planning topics, but should not be considered personalized tax, accounting, or investment advice for your specific situation.
Tax laws are complex and change frequently. The information presented here is based on current tax law as of the publication date and represents general concepts that may not apply to your circumstances. Every individual and business has unique factors that affect their optimal tax and financial planning strategies.
Before making any financial decisions or implementing any tax strategies discussed in this newsletter, please consult with a qualified tax professional, CPA, or financial advisor who can evaluate your specific situation. If you'd like to discuss how any of these topics might apply to your circumstances, I'm always happy to chat.