How can they make the Mets fan pay taxes on a baseball even if he doesn't sell it?

Question

The ball has no value to him except that it's Barry Bonds 756th HR. The ball is only conceived to be worth $500,000 by people who think that's what it would be worth. Isn't the ball priceless? And if the IRS can do that, shouldn't everyone who catches a HR or foulball be taxed? Or should they just throw the ball back onto the field? LOL

Answer 1

Its a stupid law, but its just like winning the lottery or anything else, its taxable. I think it should only come into effect if he sells it, but thats not the way the law is written. Leave it to the US government to come up with a goofy law like that that basically forces the guy to sell the ball so they can get their tax money from it. I think if he wants to keep he should be able to with no tax penalities associated with doing so.

Answer 2

So much misinformation about this it's scary. The IRS has the right to tax anything that we get that is of value. However, they usually will not tax things of little value. Example - you win something in a radio contest. If it's a $20 CD or a $50 gift card, you will not get taxed on it because there is a minimum value that is required. It is similar to a person that does contract work, if a prize is awarded in excess of (my figure might be off - it was accurate a couple years ago) $800, the person who gives you that prize must report it to the IRS. The IRS will not come knocking down your door the minute you win it and make you write out a check ,but you will be expected to report it as income on your tax return. Until this man sells that ball, the only value it has is that it is a baseball, probably about $15. This is below the minimum, and will not be taxed unless the Man reports it as income. However, the minute he sells it, he has earned income from that ball. The IRS does not tax people on an "estimated " value of an item - they tax it at it's retail value. And until it is sold, the ball is worth no more then any other ball.

Answer 3

This is no different than property taxes. If you own a home, the government appraises the value of the home in an effort to determine the amount of yearly taxes that you have to pay on the home. It doesn't matter that the economy has taken a turn and home values are dropping. It doesn't matter that you could not sell your home for their appraisal. The government places THEIR value on the home and collect taxes as such.

Right now, the government will only get involved in these situations when they think there is a large payout on their side; however, I could just see it getting out of hand though. A kid is standing on the sideline of a game and gets an autograph from a sports star. An IRS agent steps in and tells the kid that he has just increased the value of his property 20 times and he needs to pay property gains tax. LOL.

Answer 4

I don't think they can tax him until it actually sells, as then there will be a paper trail of who bought it, auction fees, etc. If you inherit stock, you don't get taxed until you sell it, then you pay capital gains on the profit. If you win the lottery, the can't tax you unless you actually cash the ticket. Same with real estate, you don't pay tax on the profit of your home selling until you actually sell it. He can probably deduct the cost of the ticket he bought from his profit. Unlike real estate, this is a one of a kind item, so there is no method to accurately establish the value of the ball.

Answer 5

I thought the same way. But think about this. You pay taxes on your house's appraisal value every year. And you don't sell it. It stinks but that's just the way it is.

Answer 6

interesting argument