$2 million offered for Judge HR ball (Page 2): To: rcarol; Because an international auction site has already valued the ball at 5 million dollars and the IRS will treat it as income.

Amielee Loc: Eastern Washington State

To: rcarol; Because an international auction site has already valued the ball at 5 million dollars and the IRS will treat it as income. In addition if he kept it for the rest of his life he would not have to pay any additional tax unless it was then worth over 12.5 million then his estate would have to pay the tax.

Amielee Loc: Eastern Washington State

SteveR wrote:

There was a news article about this. If he gives the ball to Judge, there would be no income tax.

Judge is not the owner of the ball. If he gave it to Judge there would be a 16% gift tax. The team is the owner of the ball and if he returned it to the owner there would be no tax.

jbk224 Loc: Long Island, NY

Amielee wrote:

To: rcarol; Because an international auction site has already valued the ball at 5 million dollars and the IRS will treat it as income. In addition if he kept it for the rest of his life he would not have to pay any additional tax unless it was then worth over 12.5 million then his estate would have to pay the tax.

I don't agree with you.
1st-we do not yet have tax on 'unrecognized gains'. And this is specifically targeted at items like this, stocks, and real estate.
Therefore, he has no tax at this point.
2nd-One needs to keep an 'asset' for a specific time period before capital gains taxes are applied. And the calculated value is based on sales price less 'purchase price'.
3rd-He may have future issues regarding jurisdiction since he caught/acquired the ball in NY and resides somewhere else. This may or may not apply based on what NYS and NYC decides to do and whether it is legal or not.
4th- If he gives it to Judge for nothing--he has no taxable event.
If he gets something in return; such as autographs, bats, jerseys, ....; he now has items of value to be determined. And the value of the ball is to be determined.
Again, items have unrecognized gains that are not taxable..until sold. And the gains to be determined.

jbk224 Loc: Long Island, NY

Amielee wrote:

To: rcarol; Because an international auction site has already valued the ball at 5 million dollars and the IRS will treat it as income. In addition if he kept it for the rest of his life he would not have to pay any additional tax unless it was then worth over 12.5 million then his estate would have to pay the tax.

More....
You bought your home for $250,000.
It is currently worth $2,000,000. This is what a local real estate broker told you it is worth.
I guess you are currently liable for tax on your home based on it's anticipated value at sale.
or
You just found a Z9 at your front door. 3 clicks.
Get ready to pony up a tax on it's current value. Not sales tax..but income or gains taxes.

jerryc41 Loc: Catskill Mts of NY

rcarol wrote:

Please enlighten me. Why would he have tp pay 16% of $5 Million if he gave the ball to Judge? Why would he have to pay as much as 38% in tax if he decides to keep it?

Yeah, but Ruth did it with the "old fashioned" bat and ball.

whatdat Loc: Del Valle, Tx.

Amielee wrote:

If he gives it to Judge the income tax on it would be 16% of 5 Million. If he keeps it the tax may be as high as 38%. If he sells it then he has capital gains tax to pay. If he gives it back to the team there will be no tax on it.
The trouble of catching a ball is hardly worth it.

I’d take the $2M. Even 50% after taxes would definitely be worth it to me.

Boomer Jim Loc: Newcastle Okla

Why not find the highest bidder and give Judge the first option to buy it?

markngolf Loc: Bridgewater, NJ

SteveR wrote:

There was a news article about this. If he gives the ball to Judge, there would be no income tax.

I appreciate your response with the info about a news article. It seems so simple. If I am walking down the street and find a bag with $1,000,000 and I discover who lost it and return it to the individual, of course there is no tax due when I file income taxes. My income did not change. The heroic act would be to give it Aaron Judge, but I doubt few would do that. Ah, for the good old days!
Mark

Alafoto Loc: Montgomery, AL

Amielee wrote:

If he gives it to Judge the income tax on it would be 16% of 5 Million. If he keeps it the tax may be as high as 38%. If he sells it then he has capital gains tax to pay. If he gives it back to the team there will be no tax on it.
The trouble of catching a ball is hardly worth it.

Gee, keep the ball and sell it for the offered price, retaining 62% of two million bucks, or give it back to the team and incur no tax liability, but also no take home. Tough decision.

SteveR Loc: Michigan

markngolf wrote:

I appreciate your response with the info about a news article. It seems so simple. If I am walking down the street and find a bag with $1,000,000 and I discover who lost it and return it to the individual, of course there is no tax due when I file income taxes. My income did not change. The heroic act would be to give it Aaron Judge, but I doubt few would do that. Ah, for the good old days!
Mark

You have to think, though, Mark, to many, that 2 mil could be a life changer. My wife and I are pretty well set, but with the income from selling that ball, we could certainly help our struggling kids. I'd have to keep it. We help our kids as much as we can, but they still struggle.

markngolf Loc: Bridgewater, NJ

SteveR wrote:

You have to think, though, Mark, to many, that 2 mil could be a life changer. My wife and I are pretty well set, but with the income from selling that ball, we could certainly help our struggling kids. I'd have to keep it. We help our kids as much as we can, but they still struggle.

I understand. My two are in similar positions.
Mark

SteveR Loc: Michigan

markngolf wrote:

I understand. My two are in similar positions.
Mark

I hate to say this, Mark, but they'll struggle until we die. Same as we did.

markngolf Loc: Bridgewater, NJ

SteveR wrote:

I hate to say this, Mark, but they'll struggle until we die. Same as we did.

Struggle is a relative word, Steve. "Struggle" for my kids is a "rich" status for many others who are much less fortunate. I'm sure you understand.
Mark

SteveR Loc: Michigan

Here is a good story about the 19 year old kid who caught Maris' 61st homer. Another story told about a man in CA who advertised that he would by the ball for $5000 and would then give it to Maris, providing that Maris come to CA to get it. The kid and Maris flew out together to make the transaction. Maris later donated the ball the the Hall of Fame. When the New Yankee stadium opened, the kid threw out the first pitch. On the 50th anniversary of Maris homer, wearing white gloves, he took the ball onto the field to show to the crowd. My wife also heard a radio report that the $5000 he got from the ball helped him to buy a house, get married and start a family. It also said that he and Maris became friends.

https://www.silive.com/sports/2022/09/a-look-back-eventual-islander-sal-durante-caught-roger-maris-record-setting-61st-home-run-ball-and-became-part-of-history-photos.html

Here's another story with some photos and some more facts.

https://www.silive.com/memories_column/2015/02/sal_durante_staten_islands_own_baseball_legend.html

wrangler5 Loc: Missouri

If the one who catches a ball can claim legal ownership (which I think is the rule for balls hit into the stands) why is that not "treasure trove" as the tax folks call it? If it is, then it should be reported on a tax return as ordinary income, the only argument left being - how much?

In this case there appears to be a minimum value set by the auction house offer, although the IRS could certainly assert that the ball was actually worth more. And, if the rules I learned while practicing tax law still apply, it would be up to the taxpayer to prove the IRS wrong.