OT: Bonds' home run ball--Taxable? ***?!?

[BumbleBeeDave]

We and a story in our paper this morning from the AP saying that the home run ball from Barry Bonds' 756th HR was caught by a fan, who will be liable to pay taxes on it's value as if it was income--even if he doesn't sell it!

Is this right? This seems ridiculous . . . under this logic, any home run ball caught by a fan would be taxable, since any home run ball could legitimately be considered to have value to another baseball fan.

So this guy could be liable for thousands of dollars in taxes on this stupid baseball even if he just wants to put it on his mantelpiece at home and brag to his friends about his good luck in catching it?

This just seems crazy . . . :crap: :confused:

BBD

[BURCH]

A good tax acct or atty should be able to get him out of that nonsense.

Next they will be taxing you for those shirts they throw out at pro sports games too. Can you imagine getting a letter from the Government with a $.80 tax bill for that T-shirt that you caught from the mascot.

[Sandy]

I once caught something from Kevan and it cost me a lot more than $.80 to get rid of it!! :rolleyes: :)


Sandy

[BumbleBeeDave]

. . . but it does seem ridiculous to me. I mean, if I'm a Yankees fan and catch ANY Yankees home run ball--Jeter, A-Rod, Giambi--I could probably sell it to another Yankees fan for a couple of hundred bucks. so do they chase every fan around who catches a ball?

I would think this ball would have NO "value" unless he realizes a profit from it by selling it. If they want to tax him simply for having accidentally acquired something that has perceived value, then that applies to ANY property someone might give you and it becomes a property tax, doesn't it?

And what if he decides to donate it to the Hall Of Fame? Is the HOF a non-profit? Does it then become a charitable contribution and he can take a deduction for the perceived "value" the IRS seems so willing to ascribe to it?

Just a big ridiculous can o' worms if you ask me. His stroke of "luck" turns into a PITA where he could have to sell everything else he owns to have enough to pay the tax on this item he just wants to keep as a memento . . .

BBD

[cadence90]

So should I be paying taxes on the musette bag Roberto Gaggioli threw at me at the TdG all these years ago??? :rolleyes:


A couple of years ago I did have to fire the law firm mentioned in the article. They were terrible; it doesn't surprise me at all to see them mentioned in such a context.

[BumbleBeeDave]

Mets fan could face big tax bill over Bonds' home run ball
By MARCUS WOHLSEN, Associated Press Writer
August 8, 2007

SAN FRANCISCO (AP) -- Before he celebrates his windfall, the New York Mets fan who emerged from a violent scrum clutching Barry Bonds' record-setting home run ball should probably call his accountant.

As soon as 21-year-old Matt Murphy snagged the valuable piece of sports history Tuesday night, his souvenir became taxable income in the eyes of the Internal Revenue Service, according to experts.

"It's an expensive catch," said John Barrie, a tax lawyer with Bryan Cave LLP in New York who grew up watching the Giants play at Candlestick Park. "Once he took possession of the ball and it was his ball, it was income to him based on its value as of yesterday,"

By most estimates, the ball that put Bonds atop the list of all-time home run hitters with 756 would sell in the half-million dollar range on the open market or at auction.

That would instantly put Murphy, a college student from Queens, in the highest tax bracket for individual income, where he would face a tax rate of about 35 percent, or about $210,000 on a $600,000 ball.

Even if he does not sell the ball, Murphy would still owe the taxes based on a reasonable estimate of its value, according to Barrie. Capital gains taxes also could be levied in the future as the ball gains value, he said.

On the other hand, he said, if the ongoing federal investigation into steroid abuse among professional athletes takes a criminal turn for Bonds, the ball's value could go down -- which would likely allow Murphy to claim a loss.

Not everyone concurs on Barrie's interpretation of the intersection between professional sports and the nation's tax code.

But for its part, the IRS seems reluctant to clear up the confusion. With six-figure treasures so rarely falling out of the sky, the agency declined to comment Wednesday on what regulations would apply and whether they would be enforced in the case of the Bonds ball.

History does not provide much of a guide since most fans who have been lucky enough to snag previous long balls have chosen to sell their mementos. And at least one ball was as much a source of embarrassment for the IRS as revenue.

As Mark McGwire chased the mark for most home runs in a season in 1998, IRS officials initially said the ball that broke Roger Maris' long-standing record could be subject to taxes even if it were returned to McGwire. The statements were ridiculed by politicians and quickly disavowed by the agency's top brass.

"All I know is that the fan who gives back the home run ball deserves a round of applause, not a big tax bill," then-IRS Commissioner Charles Rossotti said at the time.

Ultimately, Tim Forneris, a member of the St. Louis Cardinals grounds crew, recovered McGwire's 62nd home run ball. He turned it over to the Cardinals and received a trip to Disney World and a minivan in return.

Phil Ozersky, a Cardinals season-ticket holder, caught McGwire's 70th homer later that season and sold it in 1999 to comic book artist Todd McFarlane for $3 million.

A spokeswoman for the Giants said that as with any ball that enters the stands at AT&T Park, Bonds' 435-foot drive into the right-center field stands belonged to the person who caught it, so the team wouldn't seek its return. Bonds said he also had no interest in retrieving it.

Murphy, who went to the game during a layover from a flight to Australia, grew up near Shea Stadium and was wearing a Mets jersey when he made the charmed grab.

He told the New York Daily News he planned to keep 51 percent of the proceeds from the sale of the ball and would give the rest to his friend, Amir Kamal, 21, of New York, who was also at the game.

"I won the lottery," he told the newspaper. "I'm going to be smart about what I do with it."

[William]

Actually this could be very entertaining. Instead of the crowds climbing over each other to "get" the ball, now they'll be running like wild fire to get away from it. I think they should add that if the ball touches you, or anything you own...it's yours. And hence you'll be liable for all taxes, fees, and gratuities that may be incurred by owning said ball. There should also be a transfer fee involved as well. I mean, the ball had to get to you didn't it.?




William ;)

[cadence90]

Actually this could be very entertaining. Instead of the crowds climbing over each other to "get" the ball, now they'll be running like wild fire to get away from it. I think they should add that if the ball touches you, or anything you own...it's yours. And hence you'll be liable for all taxes, fees, and gratuities that may be incurred by owning said ball. There should also be a transfer fee involved as well. I mean, the ball had to get to you didn't it.?




William ;)
Yeah but then the only people attending "America's National Pastime" would be 4 Swiss guys wearing Assos throwback jerseys.... :banana:

[gt6267a]

if you need the money for the taxes, sell the ball and pay the income tax on the sale ...

[MarleyMon]

maybe those bleacher bum Cubs' fans have the right idea - "Throw it back, throw it back" they chant (only for the visitor's homers, though).

If its income, can he deduct his travel and medical expenses? Pain and suffering from being pummelled?

[fierte_poser]

maybe those bleacher bum Cubs' fans have the right idea - "Throw it back, throw it back" they chant (only for the visitor's homers, though).

If its income, can he deduct his travel and medical expenses? Pain and suffering from being pummelled?

He should definitely be able to deduct the price of the tickets as a business expense.

[OldDog]

The Gov't can piss away TRILLIONS taking care of the rest of the world, and the IRS wants to harrass a baseball fan for more money to give elsewhere? Not even a fan, as the guy was passing through town and picked up some last moment tickets!!!

[bzbvh5]

Is this right? This seems ridiculous . . . under this logic, any home run ball caught by a fan would be taxable, since any home run ball could legitimately be considered to have value to another baseball fan.

So this guy could be liable for thousands of dollars in taxes on this stupid baseball even if he just wants to put it on his mantelpiece at home and brag to his friends about his good luck in catching it?

BBD

You are correct BumbleBee Dave, any home run ball could legitimately be considered to have value. In the Tax arena we often consider income as material or immaterial. Most dingers are immaterial.

If you at Las Vegas winning a little bit of money from the slots, the IRS doesn't care (immaterial). If you win a large jackpot and the money doesn't come pouring out and you have to call a steward to get your money, you can bet your fat ### that the IRS will get your Social Security number before your winnings are given (material).

You have to remember taxing authorities are always trying to get more money. Wisconsin wanted to tax meals served on air liners while over their air space. Philadelphia wanted to tax pro athletes of the visiting teams for the portion of their salary while playing in Philly.

[93legendti]

You are correct BumbleBee Dave, any home run ball could legitimately be considered to have value. In the Tax arena we often consider income as material or immaterial. Most dingers are immaterial.

If you at Las Vegas winning a little bit of money from the slots, the IRS doesn't care (immaterial). If you win a large jackpot and the money doesn't come pouring out and you have to call a steward to get your money, you can bet your fat ### that the IRS will get your Social Security number before your winnings are given (material).

You have to remember taxing authorities are always trying to get more money. Wisconsin wanted to tax meals served on air liners while over their air space. Philadelphia wanted to tax pro athletes of the visiting teams for the portion of their salary while playing in Philly.

Anyway, here is an article that circulated around the department which explains the whole Bonds thing ad nauiam.

http://www.wtexecutive.com/cmspreview/content.jsp?id=com.tms.cms.section.Section_Tax_Exe cutive_Briefing

No reason to panic:

"...In fact, history suggests that the IRS tends to show up at the same time the money shows up—when a ball is sold. In most cases, a baseball fan will either sell a souvenir ball right away and thus convert the ball to cash in the same year, or (less often, but not infrequently) will return it to the ballplayer. In the former case, the IRS wants its share of any cash; in the latter case, to my knowledge, the IRS has never attempted to tax this act of generosity (although, again, under a strict construction of the tax law the IRS could probably treat a catch-and-return, as (1) taxable income, followed by (2) a taxable gift).

And what if Taxpayer 756 catches the ball and decides to keep it? Based on past history, the IRS has not made a major effort to keep track of and tax such mementos..."
http://www.wtexecutive.com/cmspreview/content.jsp?id=com.tms.cms.section.Section_Tax_Exe cutive_Briefing[/

[Ozz]

I can't see where it is worth anything until he sells it....there may be expert opinions on what it might be worth...but no one really knows for sure, so how would the amount of the tax be determined?

Besides...it's yesterday's news.....BB hit 757 last night....how much is that one worth?

Barry must feel like the Federal Reserve.....just creating money out of thin air! ;)

:beer:

[dwightskin]

it was marked down to $2.50 from $10. Anyone who bought at $10 should take a tax deduction on the reduced value.

I also bought some BMC logo items after Floyd won the Tour that are obviously reduced in value - again with a long term loss.

I'm not a huge sports fan so I don't know all of the other guys that fell from grace, but basically, the IRS is going to eat it if they try to tax collectables before they are sold. More items are depreciating than are appreciating.

Dwight

[fiamme red]

Barry must feel like the Federal Reserve.....just creating money out of thin air! ;)

:beer:Well, the government creates bonds out of thin air: to pay off old bonds, the government simply issues new bonds! ;)

[BumbleBeeDave]

I hope Ahneida Ride doesn't see your post, Fiamme . . . this thread will go on for weeks! ;)

BBD

[Ozz]

Well, the government creates bonds out of thin air: to pay off old bonds, the government simply issues new bonds! ;)
I forget the exact process...but issuing bonds is printing FRN.

Congress authorizes the debt....the Fed buys the bonds...and authorizes the Treasury to print the FRNs....or something like that. Fly-man??

[JMerring]

See attached if you are very bored and interested in tax esoterica as it relates to Barry "Steroid Boy" Bonds.

[weiwentg]

You are correct BumbleBee Dave, any home run ball could legitimately be considered to have value. In the Tax arena we often consider income as material or immaterial. Most dingers are immaterial.

If you at Las Vegas winning a little bit of money from the slots, the IRS doesn't care (immaterial). If you win a large jackpot and the money doesn't come pouring out and you have to call a steward to get your money, you can bet your fat ### that the IRS will get your Social Security number before your winnings are given (material).

You have to remember taxing authorities are always trying to get more money. Wisconsin wanted to tax meals served on air liners while over their air space. Philadelphia wanted to tax pro athletes of the visiting teams for the portion of their salary while playing in Philly.

Agree, the IRS will probably tax it - although, as one other poster said, it would seem more reasonable to levy the tax when the ball is sold. I believe that as a collectible, the maximum capital gains rate is 28%.

Look at it this way. If a celebrity receives a very expensive gift box for attending some soiree, shouldn't they be taxed on the fair value of the gifts? Otherwise, they've made a free windfall.

Remember, the IRS requires tax to be paid even on ill-gotten gains, like theft, larceny, and extortion. I don't know how often that gets enforced, but the law is on the books. If you get your creditors to write down some of your debts, the IRS requires tax to be paid on the written-down amount. If you win a prize at a lottery, cash or kind, the same thing happens. If you get a sign-up bonus at a bank, the same thing happens. It's life. The guy can conceal this income and take the risk if he wants, but he would be wrong according to the tax laws, and the IRS might come after him.

PS, if Barry Bonds stars in a drugs scandal, the lucky guy would not be able to take a capital loss deduction. His purchase price was zero.

[JMerring]

Attachment too big - sorry!

[Ahneida Ride]

Actually this could be very entertaining. Instead of the crowds climbing over each other to "get" the ball, now they'll be running like wild fire to get away from it. I think they should add that if the ball touches you, or anything you own...it's yours. And hence you'll be liable for all taxes, fees, and gratuities that may be incurred by owning said ball. There should also be a transfer fee involved as well. I mean, the ball had to get to you didn't it.?
William ;)


BIG BROTHER KNOWS BEST !!!!!!!

[William]

BTW,


Any of you....."Forumites".....bust Ahneida about FRN's..........and I'll kill ya! :butt:

http://www.youtube.com/watch?v=jTUruCv4Qi4








William ;)

[Elefantino]

If we abolish the IRS and substitute a "fair tax," he would only have to pay taxes on the tickets he bought, not the ball.

If we abolish the IRS and substitute a "flat tax," he pays the same tax as those who didn't catch the ball.

But we didn't abolish the IRS, so it can audit the young man without cause under the guise of the USA Patriot Act.

Barry Bonds, fighting terrorism!

[darylb]

Look at it this way. If a celebrity receives a very expensive gift box for attending some soiree, shouldn't they be taxed on the fair value of the gifts? Otherwise, they've made a free windfall.

.


I dont think it is the same thing at all though. The gift basket's purpose from inception was to be a gift. The ball was intended to be one of many used in a game. The pitcher intended for it to be a strike and the hitter intended to hit it with hopes of it flying out of the park. The ball had a value of about $6 until it crossed the plane of the outfield fence.


Plus, it wasnt given to him, he fought for it. Maybe he should write a check for the taxable amount and throw it into a group of people and have the IRS see if they can come out of the pile with it.

Then there would be the question of value. Who can say there is a monetary value if the owner has no intention of selling? It has no value to me. I dont want it.

I havent heard one way or another but I would guess the guy would sell it but if not, the IRS should leave him alone.

[rwsaunders]

That's to pay for Barry's tax woes of a few years back.

[ss-jimbo]

If we abolish the IRS and substitute a "flat tax," he pays the same tax as those who didn't catch the ball.

Actually a flat tax doesn't mean everyone pays the same fixed amount, only the same percentage. Thus he would pay the same percentage on the ball that someone else would on their monetary income.

[darylb]

He should definitely be able to deduct the price of the tickets as a business expense.


You think beer could be considered a business expense in this case? :beer:

[djg]

What's the fuss exactly? Somebody opined as to tax liability. Nobody has been hounded, sued, or jailed. If the fella wants a tax opinion of his own, he can hire an attorney, or ask the IRS for an opinion letter, or hire an attorney to ask the IRS for an opinion letter.

We have a government; it collects taxes; the way in which it collects taxes has various wrinkles for different categories of income, gifts, and the like. If you don't like the way the IRS taxes various sorts of windfalls, you can write your elected representatives, but it's hard to see that this particular situation has to do with fairness or social justice. Somebody got lucky and caught a ball that may be worth a bunch of money. We're not sure how much, although likely there will be offers, and if the IRS comes up with a number the fella or his representatives will have an opportunity to haggle. If he has to sell the ball to fork over to the government a portion of the money, and still walks away with a bunch of money, which he didn't really earn, which has nothing to do with days or weeks or months of toil, or with years of training, why is that worse than the contribution withdrawn routinely from my paycheck (which I get by actually showing up to work each day)? Are we worried about social incentives here? That excessive taxation of ballpark windfalls will suppress the important supply of folks willing to hustle for record-breaking baseballs in the future?