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Fenway
08-09-2007, 02:23 PM
Is he nuts???

"Part of me wants to keep it. It's the greatest American sports accomplishment in history," Murphy said Thursday on NBC's "Today Show." "Part of me might want to sell it, but I really am leaning towards keeping it. It's just too valuable, sentimental."

Any tax lawyers here? This can't be true.


Even if he does not sell the ball, Murphy would still owe the taxes based on a reasonable estimate of its value, according to John Barrie, a tax lawyer with Bryan Cave LLP in New York. Capital gains taxes also could be levied in the future as the ball gains value, he said.
On the other hand, he said, if the ongoing federal investigation into steroid abuse among professional athletes takes a criminal turn for Bonds, the ball's value could go down -- which would likely allow Murphy to claim a loss.


Fan who caught Bonds ball may not sell (http://www.boston.com/sports/baseball/articles/2007/08/09/fan_who_caught_bonds_ball_may_not_sell/)

Cuck_The_Fubs
08-09-2007, 02:27 PM
Fool. Just sell the tainted piece of (...).

QCIASOXFAN
08-09-2007, 02:30 PM
You have to be joking on both quotes.

IlliniSox4Life
08-09-2007, 02:37 PM
Any tax lawyers here? This can't be true.



Im not a tax lawyer, but technically that is correct. For example, if you were to be walking in a field and find a treasure chest with a bunch of old jewels worth a lot of money, you would technically owe taxes on the value of the jewels.

The question becomes, how do you assign the value? Most of the time people who come into possession of something valuable like that wouldn't pay the taxes until they actually sell it because it's hard to assign a value, or they would assign a really low value and pay the taxes on that, later selling it and paying the taxes on the difference. But with something as public as the Bonds ball, the guy would be wise to pay the taxes on a "reasonable" estimate, as the article says. Whether that is $200k or $750k, I don't know. He would be stupid not to pay anything though. And if he can't afford it, he should sell it.

voodoochile
08-09-2007, 02:47 PM
Sell it. Sell it now. Take whatever you can get for it because once Bonds goes down for steroids on whatever level, the record ball means nothing and it's value will diminish greatly.

How much are the shoe's Ben Johnson's wore to break the 100M record worth today?

VenturaFan23
08-09-2007, 02:54 PM
That blow to the head must have done some serious damage!

Madvora
08-09-2007, 03:16 PM
Do you guys really think the ball would go down in value if he was guilty of steroid use?
I would think it would at least remain the same value, most likely be more valueable.

BainesHOF
08-09-2007, 03:27 PM
The value of the ball goes down by the day as the intensity of the attention focused on the moment cools. You have to strike while the iron's hot to maximize its value. Bonds' jerky personality and the steroid controversy has affected the price of the ball in a negative way. When he's officially convicted, the ball will become less valuable. Ultimately, his final home run will be worth the most. And that ball will decrease in value when A-Rod breaks the record a few years from now.

jackbrohamer
08-09-2007, 03:27 PM
He's posturing. He wants to get the bidding up by pretending that he may keep it.

ilsox7
08-09-2007, 03:27 PM
Is he nuts???



Any tax lawyers here? This can't be true.



Fan who caught Bonds ball may not sell (http://www.boston.com/sports/baseball/articles/2007/08/09/fan_who_caught_bonds_ball_may_not_sell/)

I'll be a tax lawyer in about 12 months . . .

As with many law-related questions, there is not necessarily a clear answer. I actually would not be surprised to see a version of this situation appear on a tax law exam or two throughout the country this fall. Below is a link discussing the potential tax treatments of the ball.

Tax Law Rules (http://blogs.wsj.com/law/2007/07/25/tax-law-final-exam-question-barry-bondss-ball/)

EDIT: Read the comments if you want a pretty good discussion on the issue. My gut tells me that it is probably taxable. A couple of the guys in the comments do a pretty good job of analyzing the law, IMO.

voodoochile
08-09-2007, 04:26 PM
Do you guys really think the ball would go down in value if he was guilty of steroid use?
I would think it would at least remain the same value, most likely be more valueable.

Definitely. It's not worth nearly as much if he goes down on steroid charges.

ode to veeck
08-09-2007, 04:32 PM
Sell it. Sell it now. Take whatever you can get for it because once Bonds goes down for steroids on whatever level, the record ball means nothing and it's value will diminish greatly.

How much are the shoe's Ben Johnson's wore to break the 100M record worth today?

and if it were subject to say the same absurd tax laws we have in this country as say AMT is as currently applied to certain types of stock options, you might still be subject to taxes on the original estimated value on the date you acquired it even if it lost most of its value(e.g. after a Bonds indictment or conviction), but I'll stop here as I'm treading dangerously close to a ... political discussion (Ode seals his lips ... zip)

voodoochile
08-09-2007, 04:34 PM
and if it were subject to say the same absurd tax laws we have in this country as say AMT is as currently applied to certain types of stock options, you might still be subject to taxes on the original estimated value on the date you acquired it even if it lost most of its value(e.g. after a Bonds indictment or conviction), but I'll stop here as I'm treading dangerously close to a ... political discussion (Ode seals his lips ... zip)

Well then he should also be able to write off the lost value on his taxes. It won't cover all of the loss, but it should allow him to recoup some of the money he would owe.

ilsox7
08-09-2007, 04:36 PM
Well then he should also be able to write off the lost value on his taxes. It won't cover all of the loss, but it should allow him to recoup some of the money he would owe.

The issue there is the capital loss limit is $3,000 per year. So it could take him quite a while to write off his entire loss.

ode to veeck
08-09-2007, 05:17 PM
Well then he should also be able to write off the lost value on his taxes. It won't cover all of the loss, but it should allow him to recoup some of the money he would owe.

doesn't work that way with the AMT and certain stock options, people have lost their homes and entire life savings over vapor valuations

ilsox7
08-09-2007, 05:25 PM
doesn't work that way with the AMT and certain stock options, people have lost their homes and entire life savings over vapor valuations

Generally speaking, if someone plans well and uses an expert, this will not happen. The people who have lost have either knowingly taken on a grand risk or have not had an understanding of how things work.

IlliniSox4Life
08-09-2007, 05:34 PM
There are three things that will decrease the value of the ball, IMO, in no particular order:

1) Bonds goes down on Roids charges
2) Bonds retires (once he retires the prize is no longer the one that broke the record, but his last HR hit)
3) ARod gets closer and closer to the record and stays healthy


Explanations:
1) The ball is no longer just "tainted", but it is now official that he cheated and on the record. There's the off chance he could be banned from baseball and/or his record could be taken out of the books.

2) Bonds ends up hitting 809 home runs. The record is 809 now. Would you rather have the one that broke the record, or the one that set the new record? Every ball he hits from now on is devaluing the previous ball hit before it.

3) The closer ARod gets to breaking it, the more likely it is he will break it, and who would pay a ton of money when in a couple of years somebody might break that record. If he does break it, the value goes down tremendously.

ilsox7
08-09-2007, 05:37 PM
There are three things that will decrease the value of the ball, IMO, in no particular order:

1) Bonds goes down on Roids charges
2) Bonds retires (once he retires the prize is no longer the one that broke the record, but his last HR hit)
3) ARod gets closer and closer to the record and stays healthy


Explanations:
1) The ball is no longer just "tainted", but it is now official that he cheated and on the record. There's the off chance he could be banned from baseball and/or his record could be taken out of the books.

2) Bonds ends up hitting 809 home runs. The record is 809 now. Would you rather have the one that broke the record, or the one that set the new record? Every ball he hits from now on is devaluing the previous ball hit before it.

3) The closer ARod gets to breaking it, the more likely it is he will break it, and who would pay a ton of money when in a couple of years somebody might break that record. If he does break it, the value goes down tremendously.

I think it has already decreased in value with #757 being hit. If it were a decent human being who hit it, I would seriously consider giving it back to him for season tickets or something along those lines. But if I had caught Bonds' #756, it would have been sold within a day or two.

Goose
08-09-2007, 05:37 PM
If he was a Mets fan, why didn't he just throw it back?

That would prove he was a real Mets fan!

ode to veeck
08-09-2007, 05:45 PM
Generally speaking, if someone plans well and uses an expert, this will not happen. The people who have lost have either knowingly taken on a grand risk or have not had an understanding of how things work.

sorry this isn't true, and I know of cases where people asked the "experts" and then lost everying when stock valuations went down and they still owed for the option exercise value, a pretty broken part of the tax code (& ruthlessly enforced by the IRS), but I digress and this is too tangential a discussion, so I'll end it here

ilsox7
08-09-2007, 05:47 PM
sorry this isn't true, and I know of cases where people asked the "experts" and then lost everying when stock valuations went down and they still owed for the option exercise value, a pretty broken part of the tax code (& ruthlessly enforced by the IRS), but I digress and this is too tangential a discussion, so I'll end it here

It's not worth the debate on this thread, as you've mentioned, but this link (http://www.nceo.org/library/amt.html)provides a good summary, IMO. Again, I am no expert in all of this, but I have some knowledge.

EDIT: I should add that I am not advocating for no changes to the AMT, but am just pointing out that, IMO, people who plan properly and know the rules can avoid getting killed with the AMT and their options.

ode to veeck
08-09-2007, 05:58 PM
It's not worth the debate on this thread, as you've mentioned, but this link (http://www.nceo.org/library/amt.html)provides a good summary, IMO. Again, I am no expert in all of this, but I have some knowledge.

not the best reference on it (for clarity's sake) but seems OK in terms of technically accurate. so if you had AMT kick in on your ISO option and the stock went in the tank, AMT kicks in and overrides the "normal" captial gains rules and even though you sold at a small fraction of what it was worth when you exercized, you have to pay tax at the exercise date value and AMT rate, and as your reference points out you can take credit in future years for the "min tax credit" of the situation, but that does folks little good later when they've had to liquidate their homes and all assets to pay the AMT amount in the short term (and maybe still owe the IRS a ton of money) ... simple eh? no wonder the experts regularly provided poor guidance on it

fortunately, because of all the (mostly) employees that were totally hosed by this, most companies no longer offer incentive options

back to the bonds ball situation, very likely could be held taxable in 07 for the value of the ball (could cost say $100k just to keep it)--fortunately no specific AMT itemization for valuable home run balls to make it worse when / if bonds gets indicted/convicted

ilsox7
08-09-2007, 06:02 PM
back to the bonds ball situation, very likely could be held taxable in 07 for the value of the ball (could cost say $100k just to keep it)--fortunately no specific AMT itemization for valuable home run balls to make it worse when / if bonds gets indicted/convicted

This kind of reminds me when the Sox raffled off the three World Series rings. I am curious what the reaction of the folks who won them was when they were told they'd owe some coin to the IRS.

ode to veeck
08-09-2007, 06:11 PM
This kind of reminds me when the Sox raffled off the three World Series rings. I am curious what the reaction of the folks who won them was when they were told they'd owe some coin to the IRS.

that would seriously suck, what did that one ring for on ebay some months back? I'd have no problem selling the bonds ball the next day, but the Sox 05 ring would be a sad situation

IlliniSox4Life
08-09-2007, 09:38 PM
that would seriously suck, what did that one ring for on ebay some months back? I'd have no problem selling the bonds ball the next day, but the Sox 05 ring would be a sad situation

I think the retail value on the auctioned rings was something like $25,000.

ilsox7
08-09-2007, 09:41 PM
I think the retail value on the auctioned rings was something like $25,000.

It went for $28,100 and was reportedly appraised at $7,950.

Daver
08-09-2007, 10:08 PM
The ball is worth whatever MLB paid for it from the manufacturer, and that is the stance I would take with the IRS should they question it.

ilsox7
08-09-2007, 10:09 PM
The ball is worth whatever MLB paid for it from the manufacturer, and that is the stance I would take with the IRS should they question it.

The IRS would chuckle, unfortunately.

Daver
08-09-2007, 10:44 PM
The IRS would chuckle, unfortunately.

Then the burden of proof as to it's actual worth falls on them, and they have to provide means to prove it.

ilsox7
08-09-2007, 10:55 PM
Then the burden of proof as to it's actual worth falls on them, and they have to provide means to prove it.

The value is FMV. That is not difficult for the IRS to prove. I've copied and pasted an excerpt from the Florida Tax Review that talks specifically about tax treatment of HR balls. The article itself is 47 pages and this is only a short paragraph or two. The cite is 4 FLTXR 685.

D. Home-Run Baseballs

To apply the foregoing analysis to record-setting baseballs chased down by fans results in the conclusion that the baseballs would be current gross income, as it appears that no person or entity (other than the finder) has a legal claim to the balls that would preclude current realization under the Section 1.61-14 or general tax principles. The item should be deemed realized unless it is disclaimed within a reasonably short period of time. The concept of disclaimer can be applied flexibly in this context to allow the ball to be “returned” to the home team, the league, an organization affiliated with the league (such as the Baseball Hall of Fame), and (more debatably) the player hitting the ball. [FN181] (http://web2.westlaw.com/result/documenttext.aspx?docsample=False&sv=Split&service=Find&rlti=1&cxt=DC&fcl=False&n=1&fn=_top&vr=1.0&findtype=F&rlt=CLID_FQRLT20512198&rp=%2fFind%2fdefault.wl&cite=4+Fla.+Tax+Rev.+685&cnt=DOC&rs=ITK3.0&ss=CNT#FNF181281050698)

An argument for “nonrealization” unique to the home-run-baseball situation might be that the value of any record-setting object cannot be *725 determined at the moment it is acquired, because such value can be diminished by subsequent record-setting items. But, insofar as the object could lose value due to future events, the current market value would be significantly discounted. From such discounted amount the value might well increase, since the possibility of subsequent record-setting items may disappear (due to the end of a season or of a slugger's career). The contingencies that affect future value are closer in kind to those that produce unrealized appreciation and depreciation than those that can be called conditions of forfeiture: a record-setting item does not lose all significant value just because the record might be (and eventually is) surpassed. Thus, the argument that value uncertainty precludes realization is not persuasive.

Another possible argument is that obtaining a record-setting baseball is closer to a commercial venture, or to a commercial bargain purchase, than to a found object, because the taxpayer “invested” in a ticket to attend the game. However, the price of the ticket is exhausted by the entertainment value of the game. The cost of the ticket is a personal consumption expense. There is no separate basis in the remote opportunity to obtain the record-setting baseball. [FN182] (http://web2.westlaw.com/result/documenttext.aspx?docsample=False&sv=Split&service=Find&rlti=1&cxt=DC&fcl=False&n=1&fn=_top&vr=1.0&findtype=F&rlt=CLID_FQRLT20512198&rp=%2fFind%2fdefault.wl&cite=4+Fla.+Tax+Rev.+685&cnt=DOC&rs=ITK3.0&ss=CNT#FNF182281050698)

Daver
08-09-2007, 11:04 PM
The value is FMV. That is not difficult for the IRS to prove. I've copied and pasted an excerpt from the Florida Tax Review that talks specifically about tax treatment of HR balls. The article itself is 47 pages and this is only a short paragraph or two. The cite is 4 FLTXR 685.

That would be easy to tie up in court for years, they have 47 pages of documents to play with, and that is only from one state, as well as speculation about Bonds and whether the achievement was tainted, which could produce thousands more documents. The IRS has a job on their hands here.

ilsox7
08-09-2007, 11:21 PM
That would be easy to tie up in court for years, they have 47 pages of documents to play with, and that is only from one state, as well as speculation about Bonds and whether the achievement was tainted, which could produce thousands more documents. The IRS has a job on their hands here.

That was just a Law Journal article that dealt with the topic. But it dealt with federal tax, meaning there is only one set of laws (the Code). It's also not the law per se, but an analysis of the law. It seems as though that analysis is being backed up by many tax professionals throughout the country.

As for the IRS' burden of proof, they do not have one. Unless it is a case of fraud, the BOP is on the taxpayer. If the taxpayer disputes this tax, they have a few options, but all of those options except one require the taxpayer to pay the tax first and then dispute their payment.

That one option is going to tax court. Now, I am not sure of the average life cycle of a case in the United States Tax Court, but I do know that if the taxpayer loses, they pay interest on the judgment.

Overall, the legal authority I have seen thus far would indicate that the guy who caught the ball will owe a tax, that tax will be determined by the IRS, and if he does not want to pay the tax, he has one option.

ilsox7
08-21-2007, 08:12 PM
The fan is auctioning the ball, but says he wanted to keep it.

http://www.msnbc.msn.com/id/20379921/

voodoochile
08-21-2007, 08:43 PM
The fan is auctioning the ball, but says he wanted to keep it.

http://www.msnbc.msn.com/id/20379921/

Baseball really needs to get it's act together and take some of the billions of dollars a year they gross and put enough aside to be able to purchase their big moment baseballs.

I mean it would be worth it to MLB to spend the $500K-1M to be able to put that ball in the HOF (well it would if it wasn't a completely tainted piece of crap).

How hard would it be to set up a league discretionary fund to be able to do this? $500K from each team to start would probably be enough for future purchases going a long way out if funded correctly. The fans could have their moment and choose to keep the baseball or turn it in for a nice payday. Heck, McD's gives away that much money and more every year. Baseball could easily afford it and then everyone truly would get to enjoy these historic moment baseballs simply by visiting the HOF.

:tool
"Give money to the fans? Are you nuts? They should be grateful for the opportunity to even touch a baseball. They should pay for the privilege of catching one and then hand it over no questions asked before paying to go see it again at the HOF. The fans exist for our pleasure. If they can't do what's right by themselves, we're not paying them. Hey Pohlad, how much for that buyout to disband your team? $300M? Peanuts for a good ole boy like you..."

soxfanatlanta
08-22-2007, 10:47 AM
Overall, the legal authority I have seen thus far would indicate that the guy who caught the ball will owe a tax, that tax will be determined by the IRS, and if he does not want to pay the tax, he has one option.

Couldn't the guy go grab himself a nice red sharpie and write, "This HR was brought to you by HGH" - to devalue the ball? Or go roll it in the mud a while to render it worthless? (Kinda like tearing a page out of a Batman issue 1)

just wondering.

voodoochile
08-22-2007, 11:05 AM
Couldn't the guy go grab himself a nice red sharpie and write, "This HR was brought to you by HGH" - to devalue the ball? Or go roll it in the mud a while to render it worthless? (Kinda like tearing a page out of a Batman issue 1)

just wondering.

WHY would he do that?

soxfan43
08-22-2007, 12:24 PM
I think its pretty sad that this kid is basically forced to sell the ball. I personally would sell it, but this kid sounds like he wanted to hold onto it, but with the tax bill, he's basically forced to sell. That's a damn shame,

SBSoxFan
08-22-2007, 01:54 PM
How hard would it be to set up a league discretionary fund to be able to do this? $500K from each team to start would probably be enough for future purchases going a long way out if funded correctly. The fans could have their moment and choose to keep the baseball or turn it in for a nice payday. Heck, McD's gives away that much money and more every year. Baseball could easily afford it and then everyone truly would get to enjoy these historic moment baseballs simply by visiting the HOF.


Doesn't this still leave the keeper with a tax burden?

Now does he turn around and sue the Giants and MLB for physical and emotional damages incurred during the scrum?

voodoochile
08-22-2007, 02:07 PM
Doesn't this still leave the keeper with a tax burden?

Now does he turn around and sue the Giants and MLB for physical and emotional damages incurred during the scrum?

If you keep it you pay the taxes. I was only suggesting that MLB try to start doing their own collecting to stop the artifacts that are a major part of the game from ending up on some rich guy's mantle.

SBSoxFan
08-23-2007, 10:27 AM
If you keep it you pay the taxes. I was only suggesting that MLB try to start doing their own collecting to stop the artifacts that are a major part of the game from ending up on some rich guy's mantle.

ok. I suppose from an economic standpoint, someone would rather auction it instead of selling it to MLB.