Tax implications of Derek Jeter's historic 3,000th MLB hit
Sunday, July 10, 2011
I was watching the New York Yankees-Tampa Bay Rays game yesterday when Derek Jeter sent his 3,000th major league hit into the left field grandstands.
I fully expected today to be writing about the tax consequences that the fan who came up with the baseball might face. And we'll get to that in a minute.
But first, the truly amazing thing about yesterday's piece of baseball history: There is a decent Yankees fan out there.
Christian Lopez, who was celebrating his 23rd birthday at new Yankees Stadium Saturday afternoon, gave the historic baseball to Jeter.
That's right. Lopez handed it over to the Yankees' captain. Lopez didn't think about keeping the ball and possibly auctioning it off to the highest bidder. He didn't negotiate with Jeter about a possible payment for the ball.
"It wasn't about the money — it's about a milestone," Lopez said to reporters. "I mean, Mr. Jeter deserved it. I’m not going to take it away from him. Money's cool and all, but I’m only 23 years old and I have a lot of time to make that. It's his accomplishment."
Lopez is more than a Yankees fan. He's a true baseball fan. And despite his questionable team allegiance, I salute him.
The good news for Lopez, aside from retrieving Jeter's hit and seeing his team win, is that he didn't leave empty-handed.
The Yankees gave Lopez four Champions Suite season tickets for the team's remaining home games, including playoff appearances. He also got front-row seats for today's game, as well as three bats, three balls and two number 2 jerseys, all signed by Jeter.
The bad news is that Lopez should shell out some bucks to talk with a tax specialist about the possible tax implications of the goodies he got from the Yankees.
Is the value of the expensive Yankees Stadium seating taxable the way prize winnings, like gambling proceeds, typically are? In a somewhat similar situation several years ago, MLB players and coaches (and other professional athletes) were hit with tax bills on the complimentary tickets they gave to family and friends.
What about the team paraphernalia Lopez got? Is it taxable immediately at its fair market value, or only at capital gains rates if he decides to sell any of it?
Or could the items be considered, for the recipient's purposes, tax-free gifts? Is there a corresponding gift exemption for corporations like the current $13,000 limit available to generous individuals?
And if there are taxes due, how strict will the IRS and the notoriously aggressive Empire State tax department be in trying to get their cuts? Will they let it slide rather than face the bad PR that's sure to ensue? Should they give Lopez a tax break here?
Tax attorneys, accountants and sports fans, what's your take? Will Lopez's moment in baseball history cost him at tax filing time?
Again, thanks Christian Lopez for your great display of sportsmanship. Here's hoping you don't end up proving that no good deed goes unpunished.
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