Can you tax some one on an item that was caught at a baseball game, solely because it broke a world record?

Question

Here's the story...

The 21-year-old New York man said Tuesday he had no choice but to sell the ball — several people told him he would be taxed on the souvenir just for holding on to it.

"It wasn't hard. It was simple math. I'm upset by the decision I had to make," Murphy said. "I wanted to keep it. I'm young. I don't have the bank account. ... It would have cost me a lot more to keep it."

I never knew that you could be taxed on an item that became a part of hisotry, due to who made contact with that object. Do they tax antiques stores as well? Or museums for what and who they hold? Is this a law? Is this common practice?

Answer 1

No you can not be taxed on an object the ball has no stated value till its sold. He can be taxed on the money he receives from selling it but not by just possessing it.

Answer 2

The answer is this : Yes the item can be taxed, but only for it's true value at prior sale. In other words, the IRS and state government cannot place a value on the object until it is sold for profit. They could hit him with a tax bill for the actual cost of the ball, around $2.00, because that would be the actual sale price paid for the ball by the MLB... Murphy would have in essence, acquired a $2.00 ball that is subject to tax on it's last sale value ! Now when he sells the ball... that's another story, he'll have to cough up a rather large piece for the IRS and state and local governments !!!

Answer 3

The amount of tax should be proportional to the value of the ball. What is the current value of the baseball and who is to set the value?

If the baseball does not have current value, it is not taxable until it is sold. When it is sold, the baseball has a value attached to it.

However, I believe the baseball does have a current value. It is either the highest price others willing to pay for it now, or the retail price of the same kind of balls. I am not an expert on tax laws and I do not know how IRS determines the current value of the baseball.

By theory, the seller should pay income tax now on the current value when the ball is caught, and pay capital gain tax when it is sold on the value increased by holding on to the ball for a period of time.

Answer 4

If the cost of the ball must be appropriately assessed in basic terms before its sale, definite tax must be levied on it. besides the shown fact that by way of as quickly as-in-a-lifetime nature of the form it is not a possibility to appropriately examine the fee and not utilising a sale happening. As such, no tax could be due until it sells. as quickly because it sells, that is fee is now conventional and tax would be due at that element. there's little question that the ball is burning a hollow in his pocket. And that is attainable that the ball could drop in fee as greater balls become the "checklist" ball. And if Mr Bonds is stripped of his checklist if the "juicing" allegations are shown then it may finally be valueless. Mr. Murphy could be nicely counseled to sell off it now as that is a "Pig in a Poke" in short order. the fast answer is that in case you sell something for greater suitable than you pay for it, that is taxable earnings. I honestly have an vintage chest of drawers that i offered at a motor vehicle boot sale in England approximately 23 years in the past for greater or less $10. that is nicely worth hundreds. If I sell it, i'm going to owe tax as quickly because it sells. that's how the equipment works.

Answer 5

It was my understanding that he could have been taxed on the net value of the ball. I don't know if that's accurate or not, but the value of the ball puts him in a different tax bracket, and is taxable because of its value.

Answer 6

It does not represent any income until he SELLS it. The amount he sells it for would be taxed as a capital gain. If he holds onto it and does not sell it, he has no 'capital gain' and, therefore, no tax liability.

Answer 7

I don't think so... I have a feeling that the people telling this guy that are the same people that want to get their hands on the ball.

Answer 8

you bet ye, windfall profits.