Why is catching a baseball taxable income?

At least with historic homerun balls, it might be hard to establish, for want of a better phrase, time of possession. Since there is almost always a scrum involved with people pushing and shoving, etc., when did the person actually come into possession? The ball could change possession a number of times in the battle. Person A might get it while the batter was still rounding the bases, where it would not be official until he "touched them all", and thus possibly worth very little for tax purposes. Person B might tear the ball from A's grip and gain possession after the hitter had touched home and was busy getting ignored.. er congratulated... by the Commissioner.

In practice, no, but in theory there would be two taxable events. The fan has taxable income as treasure trove in the value of the baseball. Then the fan also has gift tax.

If he held onto it for 30 years and then sold it, that would mean any increase in value would be ordinary income to him rather than capital gain (or even tax on collectible income, if it applied). Stu

Just because they're on the nawth side of Chi town? No, the term yankee don't apply to baseball teams in my book. I have at times even rooted for that damnyankee team in Noo Yawk, believe it or not. Just because Captain Doubleday was also a yankee officer at Fort Sumter is no reason not to believe in the universalism of our national sport. Incidentally I saw my first baseball game in 1954 at Wrigley, between the Cubs and the Braves. Even today, those two cities are still battling each other for first place. But I digress from our state tax related goals; sorry.

Monday we're off for three weeks to Italy and Greece, and it won't be tax deductible. Sign on office: Closed for Vacation - back September 10th.

ChEAr$, y'all, and Caio; ciao ? oh well Harlan

You bought a lottery ticket for $1. How much was it worth one minute later? After the drawing, it was worth $3 million (or, much more likely, $0). Values change.

But if the amount of ordinary income is $5, the IRS forebearance is pretty close to meaningless (especially if the cost of the ticket is deductible). Seth

Everything up to the catch was the same. 30 seconds later, the batter did/didn't have missed third base while running the bases. Therefore, it was/wasn't a homerun. Seth

Just to make trouble: what would the market value be of "the baseball that was hit out of the park but wasn't the record-setting homerun because he missed third base"? Seth

(snipped in large part for brevity, which is the soul of wit.

Every Friday we get from our National Association of Enrolled Agents, a weekly "EA Alert", a summary of what's new in taxes. Here is an extract from yesterday's edition: "Barry Bonds' Home Run Ball While the sports world is abuzz about the value of the 756th home run baseball Barry Bonds hit last Tuesday, the tax world is thinking about, well, the tax implications for the ball's owner. NAEA member Russ Fox opined on his blog that the ball is covered by the price of the game ticket, and therefore is not taxable immediately. However, according to a Wall Street Journal column written by Tom Herman, some experts, such as Temple Law School Professor Alice Abreu, believe the ball is instantly taxable income because it is "accession to wealth." There appears to be uniform agreement that tax will be owed when the ball is sold, but more questions arise regarding the classification of income, rate, and cost basis. Don't expect any answers from the IRS; Chief Counsel (and Tribe fan) Don Korb begged Herman not to ask him." (Hope this helps.) -said wryly

ChEAr$, Harlan Lunsford, EA n LA

Good point there. Balls are owned by the club and only by custom, do they allow fans to go home with them. A player who has just fielded a ball while running into the ivy at Wrigley many times tosses the ball over his shoulder to some eagerly anticipating fan, who, by the logic of some, would then have taxable income of, say, ... two dollars. ChEAr$, Harlan Lunsford, EA n LA

Moderator: They also do that at Major Leagur ballparks.

Reminds me. WHAT IF!////////////////???

The fan was a business executive whose company paid for the tickets and the eats for visiting salesmen to home office? Since the corporation paid for everything (peanuts and popcorn and CRackerjacks subject to 50% M&E of course), just who is taxed on the sudden increase in value of the home run ball? The exec who is the host? The corporation for whom he is merely an agent? (HEH HE HEH! and I'm leaving Monday to let y'all sort it out.)

ChEAr$, Harlan

True, but in Durham, one might have once caught a glimpse of Susan Sarandon, who is still near the top of my very short list of sexiest Hollywood types. (For the benefit of non movie/baseball fans, she starred -- quite sexually -- in the 1988 baseball movie "Bull Durham".) One might ask what this has to do with taxes on valuable baseballs. To which I must respond that I have no clue. Bill

From the official rules of baseball:

Rule 7.10(b) Comment: PLAY. (a) Batter hits ball out of park or ground rule double and misses first base (ball is dead)—he may return to first base to correct his mistake before he touches second but if he touches second he may not return to first and if defensive team appeals he is declared out at first.

No, you didn't buy a ticket, but rather put up a good-faith deposit against the possibility of you losing the bet. You trusted the state to pay you in the event you won. The lottery ticket, from an economic point of view, had only an expected value from the time you took possesion of it, and a realized value once it was determined that you either won or lost the bet. From a tax point of view, only the actual winning or losing of the bet matters.

-Mark Bole

I learned everything I needed to know about professional baseball from the 1969 Cubs.

-Mark Bole

Which brings up the question of time of possession and when it officially becomes a Famous Ball. If the defensive team appeals, then does the HR become official (and thus a famous ball) at the time of the first time around, after the umpire answers the appeal, or when the offensive team's manager is ejected from the game? (g).

It becomes a homerun ball when it has gone over the fence and the batter properly rounds the basis. It just may not be verified until later. Stu

No, I bought a ticket. I got a sales receipt. I own it.

Many years ago, the PA state lottery jackpot got to a very high (for then) value. Somebody bought 1000 tickets in PA for $1 each, and went to New York where he sold them for $2 each (according to news reports). I say they had a fair market value (in New York) of $2; expected value is irrelevant. Expected value is what a risk-neutral economically-rational person would pay, and there are none of those

I say the guy from PA had $1000 of income, independent of whether or not any of the tickets he bought and sold won anything. Seth

Really nasty case: The Umpire declares a homerun, the fan grabs the ball ($500,000 income), then on appeal the homerun is reversed. Seth

If he caught the ball as an agent of the corporation, then the corporation owns the ball and owes the taxes. If he caught the ball as an individual, then he owns the ball and owes the taxes. Seth

Just like frequent flyer miles.

Stu