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Subject Author Date
Re: Why is catching a baseball taxable income? KEBSCHULLW 08-13-2007
Posted by KEBSCHULLW on August 13, 2007, 10:24 pm
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> True, it's taxable upon receipt.

But what is the value of the ball that Barry Bonds hit for
the record setting homerun when reciept was established?

Has it been determined if Murphy was in receipt of the ball
before or after Barry Bonds crossed homeplate. I believe
that it could be sucessfully argued that if Bonds had not
crossed home plate before Murphy was in receipt of the ball,
the value of the ball was no different than any other
baseball hit into the stands, So it is critical to
determine if receipt of the ball was before or after Bond
crossed homeplate for tax purposes before consiudering any
tax implications of acquiring the historic ball.

There are rules in baseball and there is the Internal
Revenue Code and the rules of baseball cannot be ignored in
this case.

Cheers,

WDK

Moderator:
You are misquoting me. I referred to something else as
taxable upon receipt.

To the best of my knowlege, the value of the ball has yet
to be established. Your question about the timing of
crossing home plate is at best frivilous. There is only
obvious rules in Baseball applicable here would be if he
failed to touch a base, passed a runner while rounding the
bases, or ran the bases backwards. Since there has been
no appeal, those issues are moot. There are provisions in
the IRC for taxing the acquisition of wealth by chance.
They have never been applied to catching an historic home
run ball.

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Posted by Seth on August 14, 2007, 3:43 am
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> You are misquoting me. I referred to something else as
> taxable upon receipt.
>
> To the best of my knowlege, the value of the ball has yet
> to be established.

We can assume half a million or so for argument's sake.

> Your question about the timing of
> crossing home plate is at best frivilous.

Why? Isn't what matters the value at the instant of
acquisition?

> There is only
> obvious rules in Baseball applicable here would be if he
> failed to touch a base, passed a runner while rounding the
> bases, or ran the bases backwards.

And since he might have done those *after* acquisition, at
the time of acquisition the ball was only *potentially* a
record-setting homerun ball.

> There are provisions in
> the IRC for taxing the acquisition of wealth by chance.

If I win a raffle for a rare coin worth $500, I owe tax on
$500 of income (less the cost of the raffle ticket). If a
month later that coin grows in value to $50,000 (my henchmen
scratched up the only other mint copies of it around), I
still only owe taxes on $500.

Seth

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Posted by Stuart Bronstein on August 14, 2007, 3:57 pm
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sethb@panix.com (Seth) wrote:

>> Your question about the timing of
>> crossing home plate is at best frivilous.

> Why? Isn't what matters the value at the instant of
> acquisition?

Actually that's a pretty creative argument. Under baseball
rules, just because a ball is hit out of the park doesn't
mean it will necessarily be a home run?

I don't know what a court would do with that argument, but
it is certainly worth making. In fact it's the best
argument I've heard that the ball is not taxable to the
person who catches it at that time.

Stu

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Posted by Kurt Ullman on August 17, 2007, 12:08 am
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> Actually that's a pretty creative argument. Under baseball
> rules, just because a ball is hit out of the park doesn't
> mean it will necessarily be a home run?

As was mentioned, there are some things the runner can do
to mess up (forget to touch a base for instance), there are
also things the fans can do to mess up a home run (IIRC the
name correctly Steve Bartman comes to mind to Cubs fans).
There are probably at least 3-4 decision points before it is
official, going over the wall would just be the first.

> I don't know what a court would do with that argument, but
> it is certainly worth making. In fact it's the best
> argument I've heard that the ball is not taxable to the
> person who catches it at that time.

This doesn't negate the taxes, just gives a different take
on the what taxes would be owed. It would also probably
impact the basis for reselling.

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<< The foregoing was not intended or written to be used, >>
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Posted by Stuart Bronstein on August 18, 2007, 2:08 am
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>> Actually that's a pretty creative argument. Under baseball
>> rules, just because a ball is hit out of the park doesn't
>> mean it will necessarily be a home run?

> As was mentioned, there are some things the runner can do
> to mess up (forget to touch a base for instance), there are
> also things the fans can do to mess up a home run (IIRC the
> name correctly Steve Bartman comes to mind to Cubs fans).
> There are probably at least 3-4 decision points before it is
> official, going over the wall would just be the first.

>> I don't know what a court would do with that argument, but
>> it is certainly worth making. In fact it's the best
>> argument I've heard that the ball is not taxable to the
>> person who catches it at that time.

> This doesn't negate the taxes, just gives a different take
> on the what taxes would be owed. It would also probably
> impact the basis for reselling.

Do you mean that, assuming that's the law, it wouldn't
negate the ball catcher's responsibility to claim taxable
income at that time? It seems to me that if he caught the
ball when there was still a reasonable risk that ball would
not be a home run ball, and a few seconds later it did, that
he acquired it with a low basis (which would be taxable) and
left the park with a capital gain.

If Picasso gives you a painting worth $100,000 and then he
dies, making it then worth $1,000,000, when do you recognize
the additional $900,000?

Stu

<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
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