Could the IRS tax me?

Question

if i bought a ball at walmart for 1$, and then became a famous baseball player, and sold the ball to some fan for 1million? Would they tax the 1 million?

Answer 1

Most certainly, the only good thing is that the income that you made (999,999) would be capital gain income, and it would be long-term at that, which is subject to a maximum tax rate of 15% (5% for those in the 10 and 15% brackets, and in 2008 the rate goes from 5 to 0%, but if you become a famous ballplayer you'd be in a much higher tax bracket than either 10 or 15%).

Answer 2

For any thing that you own and sell for an amount greater than the basis (what you paid for it) the gain is subject to tax. If I buy a bottle of water for a $1, put it in the refrigerator and sell it three hours later for $2 , I have a capital gain of $1. That $1 should be reported on my income tax return. It is not very likely that any one would do that but if it was the last bottle of water in the middle of the desert and I got $10,000 for it the government will want their share. If I die with the bottle of water still in the refrigerator and it is still worth only $1 there is no gain and no tax.

Answer 3

The IRS taxes all citizens on everything they sell for profit. Ask any accountant, CPA, book keeper or anyone else who has ever done a tax return. It is considered taxable income. You would be better off donating it to charity!

Answer 4

Yes...the 1 Million would be income, so you would be taxed on it.

Answer 5

Absolutely... that's profit. No reason why they wouldn't tax it.

You should probably sign the ball first, though, before you tried to sell it.

Answer 6

LOL yes they would as alternative income, that is if you report it,

Answer 7

No, they'd tax your $999,999 profit when you sold it. I know, close enough......

Answer 8

any transaction is taxable
any income is taxable too

Answer 9

YES