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Originally Posted by Gary Dunaier
Bringing an old thread back to life - tomorrow it will be a year since the post that precedes this one - the topic of tax liability on significant game-used baseballs came to mind again.
Am I correct in presuming that the fan who caught Derek Jeter's 3000th hit was immediately subject to taxes based on the presumed value of the ball in the secondary market? Even if he wanted to keep it, he'd still have to pay taxes on it.
I can't help but wonder... if Jeter's 3000th hit was an actual hit and not a home run - that is, the ball had stayed on the field, and was immediately put aside for Jeter - would Jeter have been subject to the same tax liability?
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Gary
I can't comment on the US tax law, but in Canada, there would be no tax on a fan ( non-US citizen anyway) catching the ball and keeping it.
The interesting question (well, as a Canadian tax lawyer, at least interesting to me) is the fan's adjusted cost base on any subsequent sale for capital gains purposes. A gift gives the donee a cost base equal to fair market value; the Canadian tax authorities might argue the acqusition was not a gift and thus the cost base is zero (in Canada, a person gets a deemed minimum cost of $1,000 on personal use property, so the gain would only be on a sale in excess of $1,000)
Employees are taxable on any benefit arising by virtue of their employment. I've never seen an assessment on circumstances similar to your question, however.
Max