I just honestly don't understand why the guy who caught Barry Bonds' 756th home run ball has to auction it off because the taxes would be too high on it. I just don't get it! Can you please explain this to me? Since when do you have to pay for luckily catching a historic home run ball?!?
2007-08-22 08:22:43 · 5 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
To answer your question directly, he is not being taxed on catching the ball or the ball itself. Taxes will come in if and when he sells the ball for cash. He will then be taxed on the cash as unearned income. Does that help?
2007-08-22 08:37:24 · answer #1 · answered by Irish 7 · 1⤊ 0⤋
He has acquired an asset that has a tangible value. That value is subject to capital gains tax, just as if he bought a stock that went up in value. In the case of the stock, the capital gain is the difference between the purchase price and the new, higher price. In the case of the ball, the capital gain is the estimated value of the ball, since he didn't pay a thing to get it except the cost of the ticket to get into the game.
Yeah, it's screwy, but that's the way the tax law is written.
2007-08-22 15:33:08 · answer #2 · answered by Ralfcoder 7 · 0⤊ 2⤋
Uh, you don't. 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.
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 15:40:52 · answer #3 · answered by Judy 7 · 0⤊ 0⤋
Not true. Complete myth. He isn't taxed on the ball UNTIL he sells it. He will only be taxed on ball WHEN he sells it. If he doesn't want to pay taxes on it now, he shouldn't sell it.
2007-08-22 15:29:40 · answer #4 · answered by Plea_of_insanity 5 · 1⤊ 0⤋
Read the article. He said some friends said that. He did not say they were CPA's or Tax attorneys.
2007-08-22 15:32:58 · answer #5 · answered by Jimfix 5 · 0⤊ 0⤋