Ok, so I just read a news article about the guy who caught the Barry Bonds record breaking homerun ball.
He said that he has no choice but to sell it because he is going to be charged taxes just for owning the ball.
I know our tax systems is all sorts of screwed up, but how the heck can this even be possible? You can really be taxed on an object when you haven't even sold it? Can you also be taxed if someone gives you an extremely expensive gift, even if you have no intention of selling it?
I guess it's true, but it makes me angry and I don't understand it! Maybe someone with experience in tax law could enlighten me on this subject. Or if you'd just like to tell me that you agree with how annoying and wrong it is, you can do that to!
2007-08-22 08:22:03 · 9 answers · asked by T the D 5 in Business & Finance ➔ Taxes ➔ United States
I've been looking into more on my own, and you absolutely CAN be taxed for it, AND he apparently received a bill for the tax owed for owning that ball.
So for those of you who so rudely answered my question: suck it!
2007-08-22 11:01:10 · update #1
The ball has economic value. He has received an item of great worth.
The Internal Revenue Code in Section 61 states "gross income means all income from whatever source derived". It doesn't matter if the income is in the form of cash or other items. Barter transactions are taxed, buried treasure is taxed, prizes are taxed.
He's not paying taxes for owning the ball - that would be property tax. He's paying taxes for receiving the ball just as if he received a check, or stock, or a case full of cash.
Unless an item is excluded in the code then it is taxable. The exclusions begin in Section 101 and the sections following but there is no exclusion for this type of income.
There is however an exclusion for gifts so No you would not have to pay tax if you receive a very expensive gift. The giver may owe gift tax though for giving the gift. It was the gift tax issue which created all the problems with the McGwire ball in 1998. The IRS was correct that giving the ball away would result in gift tax but the public was outraged and Congress complained and so the IRS backed off.
If you would like more information on this issue then examine the articles from Tax Law Professors Abreu at Temple Law School and Graetz at Yale Law School.
2007-08-23 03:53:06 · answer #1 · answered by Anonymous · 0⤊ 0⤋
I had no idea you could be taxed just for owning an object as small as a baseball. I guess it's just a curse for owning a piece of history. You know, if this ball was caught before the media made a big deal out of homeruns and how much they were worth...we wouldn't have even seen this guys face.
On another note, I think this guy is just selling the ball because he needs the money. I mean, I think I'd sell the ball too if I was going to get half a million dollars for something that probably cost 3 bucks before Bonds smacked it into the stands.
2007-08-22 15:55:15 · answer #2 · answered by chrisamethyst 4 · 0⤊ 0⤋
Read the articles closely. It doesn't say that the IRS billed him, it says "several people" have told him he would have to pay if he kept the ball. Matt Murphy said that "several people" had told him that he'd be taxed if he kept it. If you read some of the answers on this forum, any day you can find "several people" giving totally wrong answers to questions asked. So why do you "guess it's true" - do you believe everything you read on the Internet or that someone tells you?
In a similar case a few years back, when similar rumors ran rampant, the IRS Commissioner came out with a statement that the idea was crazy.
2007-08-22 15:44:06 · answer #3 · answered by Judy 7 · 0⤊ 1⤋
I saw it too and i wa wondering why should he be taxed for that ball???? Is that a way to get him to sell the ball or something? All i know is that he is going to be making a lot of money for it once it is sold. Personally I'd sell it regardless but it is stupid they would tax him.
2007-08-22 16:31:21 · answer #4 · answered by April 3 · 0⤊ 0⤋
no ..
there isn't any taxes on the ball unless its sold
then it becomes ether income or capital gain..
its not a gift ether...
fine line between ball and finding something valuable.. ball has potential value.. but its not taxed until that value is determined...
unlike gifts..
those are untaxed up to whatever amount is set
i think its 10 grand for gifts and 600 grand if the gift is through a death or inheritance
i could be wrong... on the exact numbers.. but thats my thoughts and experiences with this issue
2007-08-22 15:37:03 · answer #5 · answered by pokerfaces55 5 · 1⤊ 0⤋
Basically they consider it taxable income, because he could sell it. So he'd probobly have to pay hundreds of thousands of dollars just to keep it. If he sells it he will still have to, but at least he'll have the money.
I personally think he should burn the ball. It's not worth anything in my book!
2007-08-22 15:47:34 · answer #6 · answered by Chanclito 2 · 0⤊ 0⤋
Now just settle down for a minute. He did not say a tax attorney or a cpa said that. He said some friends said that. It is pure bunk.
2007-08-22 15:34:16 · answer #7 · answered by Jimfix 5 · 0⤊ 1⤋
It's the IRS, it doesn't have to make sense, unfortunately. They make the rules, they change the rules, etc.
2007-08-22 15:30:02 · answer #8 · answered by Anonymous · 0⤊ 1⤋
Well you know the IRS motto, "we've got what it takes to take what you've got."
2007-08-22 17:29:34 · answer #9 · answered by Easy B Me II 5 · 0⤊ 0⤋