Why is catching a baseball taxable income?

I heard an interview with him in NPR today. He said that, in part, he is selling the ball because he has been advised that he'd have taxable income even if he doesn't sell. But, in part, it's because he can't afford the kind of security he thinks would be needed to keep it properly. He hopes someone will buy it and lend it to the Hall of Fame. Stu

Reply to
Stuart Bronstein
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Or perhaps an explicit promise on the team's website (which could be deemed part of the contract when a ticket is purchased, or at least advertising to induce the purchase of a ticket).

Quite easily. The ball club says "We paid $5 for that ball. Here's the receipt." Seth

Reply to
Seth

And, if the ball was hit out of the park - into McCoveys(sp) cove - as often happens, which could have happened with the ball in question. In that case no ticket would have been purchased.

So the catcher could use the same receipt to prove that he caught a $5 ball. I don't see how the same ball can have two different simultaneous values. BTW - As of the 11:00PM news last night: the catcher has placed the ball up for auction with a minimum bid of $100,000. So far NO bids. Perhaps with all of the drug controversy surrounding Bonds, the real value of the ball is not even in the same ball park [pun intended] that the appraisers have placed on it. If the ball ends up selling for only $50,000 (or less), does he owe tax on the actual selling price or the $500K appraised value?

--

-Ernie-

Reply to
Ernie Klein

But it could still be an enforceable contract implied in law, based on promissory estoppel. In any case it wouldn't be a gift, because whether the team demanded the ball back from someone who caught the ball but hadn't paid for a ticket would be a business decision. Like Oprah's cars.

It's Schrodinger's ball. Once it goes over the fence, it will be either be a home run or not. But we won't know for sure until any final rulings have been made. It doesn't become a home run ball when the umpire rules, that's just when we discover which it is.

He'll owe tax on the actual value, which the courts define as what a willing buyer will pay a willing seller, neither under a compulsion to buy or sell. The actual sale price within a short time after acquisition is generally considered a better indication of value than an appraisal, which is just an educated guess. Stu

Reply to
Stuart Bronstein

He owes tax on the actual selling price, which is the true market value. The fact that some "expert" was wrong doesn't affect anything. Seth

Reply to
Seth

An arms-length transaction between unrelated parties would trump an appraisal. Ira Smilovitz

Reply to
Ira Smilovitz

However, it has a market value at any time.

Suppose a typical homerun ball is worth $50. A ball is caught right at the foul line, so it's either a homerun or a foul ball. It's probably worth around $25 market value while its status remains unknown. A lot of financial instruments will have their values determined at some future date; until then, it's unknown what the value will be. But they have market values today. Seth

Reply to
Seth

Stuart Bronstein wrote: ...

But since the catcher is apparently being forced to sell to pay taxes threatened to be owed anyway, isn't that a compulsion to sell??? :)

Reply to
dpb

Exactly, and that was the point with your observation that, just because the ball goes over the fence, that doesn't mean it will necessarily be a home run. Legally, of course, for the person who catches the ball to get the value it had before the batter actually rounds the bases, he will have had to catch it before that time, and also there would have to be a significant chance that the home run would be ruled illegitimate. How many home runs are there every year? And how many are ruled ineffective? If it's not a significant number (I'd guess in the neighborhood of five percent) then for tax purposes it would have its home run value the moment it goes over the fence. Stu

Reply to
Stuart Bronstein

Sure, which means the actual value may be higher. But I doubt the IRS would go after him for tax on anything more than he actually received. Stu

Reply to
Stuart Bronstein

Alas I know much more about Baseball than I do about taxes. A ball is a home run when an umpire signals it as such. It is then subject to appeal

The "significant chance" of the on-field ruling being overturned is far less the standard for "reasonable doubt".

The seminal authority on MLB home runs since 1876 is a gentleman by the name of David Vincent with whom I have spoken on several ocassions. Until I contact him for the precise answer, my guess is in the neighborhood one tenth of one percent.

Dick

Reply to
Dick Adams

The general rule is that in a well-advertised auction with informed buyers and an absence of collusion, the seller is expected to receive FMV. Unless the seller is under a time deadline to sell (as in a December 31st auction), this will remain true.

Dick

Reply to
Dick Adams

The Rules Of Baseball "7.05 Each runner including the batter-runner may, without liability to be put out, advance -- (a) To home base, scoring a run, if a fair ball goes out of the playing field in flight and he touched all bases legally; or if a fair ball which, in the umpire's judgment, would have gone out of the playing field in flight, is deflected by the act of a fielder in throwing his glove, cap, or any article of his apparel" An unlikely exception to the above is described in Rule 7.08: "This rule also covers the following and similar plays: Less than two out, score tied last of ninth inning, runner on first, batter hits a ball out of park for winning run, the runner on first passes second and thinking the home run automatically wins the game, cuts across diamond toward his bench as batter-runner circles bases. In this case, the base runner would be called out "for abandoning his effort to touch the next base" and batter-runner permitted to continue around bases to make his home run valid. If there are two out, home run would not count (see Rule 7.12). This is not an appeal play."

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Bill

Moderator: A home run under Rule 705(a) is subject to discussion by the umpiring crew when an appeal is made that the ball was foul, did not actually leave the field of play, or there was fan interference. Such appeals are rarely upheld. However, if the batter batted out of turn, that appeal is almost always upheld.

Rule 708 came into effect in response to Joe Adcock's home run that broke up Harvey Haddix's no-hitter in the 13th inning vs Milwaukee in 1959. Henry Aaron had walked and left the base path causing Adcock to pass him and be declared out.

Reply to
William Brenner

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