Catching Jeter’s 3,000th hit could throw a curveball in fan’s pocketbook

by Daniel Glassman - Posted In: Tax

There is nothing more American than going to a baseball game.  Catching a ball at the game is a sports fan ultimate dream, especially if that ball is a result of a record breaking hit.  Last Saturday, 23-year-old Christian Lopez, was one of few lucky baseball fans who experienced that dream when he came up with Jeter’s 3,000th hit at Yankee Stadium. 

He decided to give the valuable piece of baseball memorabilia back to Derek Jeter.  As a thank you, the Yankees rewarded Lopez with autographed items and luxury suite tickets for the remainder of the baseball season, however the kind jesture could cost him financially. 

The below article explains how Mr. Lopez might be subject to income tax on the value of the “prizes” awarded to him by the Yankees.  However, Mr. Lopez may face an income tax bill significantly larger than even the full value of everything he received from the Yankees.

The IRS would likely have a strong position that Lopez had income equal to the fair market value of the baseball at the moment he caught and obtained ownership of the ball.  He would owe Federal income tax (and, if a NY resident, also state income tax) on the full fair market value of the ball.  Although the fair market value of the ball may be subject to dispute, news stories have had estimates ranging from $150,000 to $1 million.  If the ball was worth $300,000, the income tax would likely exceed $100,000.  The fact that he later gave the ball to Derek Jeter would not change the income tax consequences.  However, the gift to Jeter would be a taxable gift also based on the fair market value of the ball.  The gift would likely only use up a portion of Lopez’s lifetime gift tax exclusion amount so no actual gift tax would be owed.

To learn more about this story, click here to read the New York Times article.

To contact Daniel Glassman, click here.

Tags: Daniel J. Glassman