What if he pays taxes on it for 2007, then in 2008, Barry Bonds signs it, the pope kisses it, and it's value therefore increases $100K ? Would he then have to pay taxes on $100K ?
What if he "loses" it ?
2007-08-23 12:17:53 · 5 answers · asked by ironwood9 2 in Business & Finance ➔ Taxes ➔ United States
He doesn't have to pay taxes unless and until he sells it. That's a rumor that's going around and has been picked up by the media, but if you read the articles, there's nothing that says the IRS has said this, or anyone official, just "several people".
You don't pay taxes on increases in net worth - taxes are due on income, and this isn't income until he gets money for it. This type of situation is NOT the same as winning a contest, game or lottery.
A couple years ago when a similar situation occurred and this same rumor was running rampant, the IRS Commissioner (top guy) finally came out with a statement saying essentially that this was crazy.
2007-08-23 13:27:24 · answer #1 · answered by Judy 7 · 2⤊ 0⤋
It counts as an asset, so his net worth went up the second he caught the ball.
It's like finding a pile of money on the street - if it doesn't belong to anyone, and it becomes your property, then you've just gained something valuable and it counts as income. So he has to pay increased taxes to reflect his increased income.
He probably went from a very low tax bracket - let's say 20% to the highest tax bracket - 34%. So he'd lose at least a third of the value of the ball, and that's probably more cash than a young guy like that can really spare. So it's better for him to sell it while it's still such a popular item, and then he can use some of the cash to pay the taxes (or if he's clever, put the money in trust).
2007-08-23 12:41:54 · answer #2 · answered by teresathegreat 7 · 0⤊ 2⤋
He doesn't. The IRS has never said that he would.
If it were possible to ascertain the value of the ball without a sale it may be taxable prior to its sale. However due to the once-in-a-lifetime nature of this item it's not possible to determine the value with any accuracy without a sale.
Such things as door prizes are easy to determine the value since there are literally millions of sales of like items to make a value determination on. What the sponsor paid for the door prize is also a good barometer laking any comparisons. That ball cost the team about $8.00, however, so that's its value until a sale is made. Once a sale is made you can bet that the IRS will be waiting for their cut.
2007-08-23 16:36:45 · answer #3 · answered by Bostonian In MO 7 · 0⤊ 0⤋
yeap the man above me what he said is true. without a sale your cannot accurately measure the amount necessary for taxation. + income taxes are a joke anyone foolish to pay taxes meant they never read the constitution, the income tax dept aka IRS is a private company whom has no law power u might as well pay me for taxes. Income taxes is against 4th admentment search&seizure,5th admendment self inciminating evidence to tell them how much you make. as well as never being ratified. may i speak more . even the income tax was not properly stated gross was not defined and gross income was only apprx so... read up little more and don't be ignorant income taxes pay to private companies to fund war instruments, tobbacco alchohol, bubble gum those taxes go to school roads. and more.
2007-08-26 22:02:59 · answer #4 · answered by ryan y 2 · 0⤊ 1⤋
Because Bush needs the extra chashola to send over to Iraq
2007-08-23 12:25:25 · answer #5 · answered by Anonymous · 2⤊ 3⤋