November 30, 2022

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The fan who caught the historical Homer Aaron Judge could hit a big tax bill

The fan who caught the historical Homer Aaron Judge could hit a big tax bill

Cory Yeomans may have faced a six-figure tax bill when he discovered Aaron Judge’s record number 62 on Tuesday night at Globe Live Field in Arlington, Texas.

It all depends on what the vice president of Fisher Investments plans to do with the historic ball: give it to the Judge and the New York Yankees, keep it himself or sell it for potentially millions of dollars. Memory Lane president JP Cohen told the New York Post that the ball is worth at least $2 million.

And media reports on Tuesday night said the Dallas man hasn’t made up his mind yet. Yoman is married to sports reporter and former “Bachelor” contestant Brie Amaranthos.

save the ball

The tax rules for caught balls are as confusing as those for the fly-in-the-court rule. The IRS, which declined to comment, has not announced its position on whether the ball will become taxable when it leaves the field or when the fan who caught it sells it. The service only said that balls returned to the team are not subject to fan tax.

Some tax experts say catching a ball is a taxable event. They refer to a 1969 court case, Cesarini vs the United States. A federal judge decided that $4,467 found inside an antique piano was a taxable “windfall” much like winning a prize.

Cathy Pickering, chief tax officer for H&R Block, disagrees with this view.

“In most cases, a cheerleader who holds on to the jogging ball gets home from a Record-setting game Or a player’s 600th inning at home (for example) won’t usually owe taxes as long as they keep the ball.”

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If you keep the ball until you die, your property may owe a tax, but Pickering says this only takes effect if your property is more than $12.06 million.

Aaron Judge of the New York Yankees watches his home run record 62 this season during the first half of Game Two with a double-header in Arlington, Texas, on October 4, 2022. (AP Photo/Tony Gutierrez)

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sell the ball

Selling the ball for $2 million would likely put one or two taxpayers into a maximum tax bracket of 37%.

The actual tax depends on other factors, including your marital status, family size, income and deductions, and how long you’ve kept the ball. Holding the ball for more than a year qualifies for a lower capital gains tax rate, but the IRS has a special tax rate on “collectibles.”

Pickering told FOX Business that a ball could be considered a collectible if the game had historical significance.

“In this case, a capital gains tax of 28% will apply to the ball if it has held it for more than a year. If the holder has held the ball for less than one year, the ordinary income rates apply to the sale,” she said. The normal capital gain rate is 0%, 15% or 20% depending on the individual’s income.

Give the ball to the team

Mark McGuire Shot

Mark McGuire, the St. Louis Cardinals’ primary businessman, broke the one-season record set by Roger Maris in 1998. (Associated Press/The Associated Press newsroom)

Memory expert said Aaron Judge’s No. 62 running home ball would be more valuable than Albert Pujols’ No. 700

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The issue of taxing baseballs arose in 1998 when Mark McGuire, who played first base for the St. Louis Cardinals, tied the record with Roger Maris in 1961. An IRS sports writer asked if it was Mike Davidson, the fan who set the record number 61 for McGwire, responsible for taxes.

An IRS spokesperson said Davidson owed the gift tax because he planned to give the ball to McGuire. The statement drew widespread criticism from the White House down. Mike McCurry, President Bill Clinton’s press secretary at the time, called it “the dumbest thing I’ve ever heard.”

Pickering says the IRS blows: “While returning the ball to the club can feel like a ‘gift’ and thus subject the donor (fan) to a potential gift tax if the value is more than $16,000, the IRS says returning the ball is more like giving back.” Unwanted merchandise in lieu of a gift. In this case, returning the ball will likely not result in any taxable event for the fan.”

The The IRS quickly retreatedReport of non-accrual tax.

“Sometimes it’s hard to understand parts of the tax code like the domestic airline rule,” said Charles Rossotti, the IRS commissioner at the time.

What about perks?

Teams often reward fans who bring back historical game balls. Zach Humble caught the 3000 play ball for Alex Rodriguez in 2015 and gave it to the New York Yankees. In return, the team donated $150,000 to the favorite Hample charity. He also got two autographed bats, an autographed T-shirt, and tickets.

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Pay attention — these items are taxable, says Pickering: “Fan season tickets or other items like signed jerseys or balls will be taxable, just like other prizes.”

It’s not the sports memory your dad collects anymore

Donate to charities

What if you donated the ball yourself to a charity, such as the Baseball Hall of Fame? Can you claim a discount?

Yes, but the IRS determines how much you can deduct each year based on your income. You can carry forward any non-deductible donation for five years but then lose it, which can make it difficult to carve out a multi-million dollar ball. Pickering recommends that you speak with a tax advisor when making a large charitable gift.

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She notes that an appraisal would be required if the ball was donated to charity and was worth more than $5,000.

“If the fair market value is unknown or debatable, a valuation may be a great idea for determining the value of a donation to the ball,” she said, adding that valuation could be useful in determining the selling price.