The one-of-a-kind card created for the fantasy game Magic: The Gathering is already attracting bids of around $3 million
Becoming a multi-millionaire because of a single playing card sounds like the stuff of legends, but the fantasy could be about to become reality for a Toronto retail worker.
A unique playing card has been attracting 7-figure bids from around the world after it was verified as genuine by a leading authenticator, setting the lucky Canadian who found it, on course to become a high-net-worth individual (HNWI).
Having that kind of wealth isn’t easy though, as Kathy Sager, senior investment advisor at CG Wealth Management, told Wealth Professional in a recent interview.
Although the owner of the One Ring card, created for the Magic: The Gathering game as part of a celebration of Lord of the Rings, has chosen to remain anonymous, they gave a statement to the CBC via a PR firm saying that "…these things don't happen to people like me."
Although there are other One Ring cards around, this one is the only one inscribed with the Black Speech of Sauron in gold lettering – Lord of the Rings fans will know that the speech is one of JRR Tolkien’s fictitious languages.
But it’s not words that the card’s owner will be focusing on right now, but numbers, in dollars.
The conversion of playing card to material wealth will be reliant on selling the card to someone willing to pay a serious sum for a piece of unique memorabilia. But that doesn’t appear to be an issue with bids nearing $3 million already received.
And perhaps the soon-to-be-minted Ontarian has a canny financial plan for the money because they seem to be in no rush to quit their job and splash the cash.
"I will continue working at the same company that I've been with for the last 10 years," Newsweek reported the owner saying. "But maybe I'll take a few more vacation days.”
They’ll no doubt need some specialized financial advice from an advisor on estate planning for HNWIs.
Tax bill
While finding the card may seem like winning the lottery, there is a significant difference – tax.
Unlike a lottery win, selling the One Ring card would trigger a hefty tax bill for the owner, although this should only be on half of the profits. Still, with a 54% combined federal and Ontario provincial tax rate on a potential $3 million profit, it could mean around $800k heading to the government coffers.
But there could be even more to pay if the owner is a business or spends significant time and effort seeking to secure the highest price. That’s because they would then be taxed on the entire profit rather than the ‘inclusion rate’ of 50% that would be typical for a more casual sale.
John Oakey, vice president of taxation at Chartered Professional Accountants Canada, told CNBC that it’s subjective and “not black and white.”
