No good deed goes unpunished is a credo I’ve heard for years. I call your attention to the plight of a guy whose life was changed or is about to be changed due to the simple fact that he went to a baseball game.Sound intriguing? It is, consider this fellow named Steve Williams in San Francisco. Old Steve goes to the ballpark with some of his buddies to just hang out and have a good time. Nothing wrong with that is there?
Nope lots of folks do this every year. Go to the park, drink a few cool ones and watch the great American pastime. Only this time Sept 17, 2007 was different.
Barry Bonds steps up to the plate and knocks one into the stands for another home run. The 700th of his career. He steps into history with the likes of Babe Ruth and Hank Aaron. Hooray for sports history.
Our man Steve comes along and is lucky enough to be sitting where the ball landed and he catches it. No problem so far. He gets his picture in the paper, sits in on a couple of local news programs and makes a few rounds of the morning talk shows. Piece of cake.
Now what happens?
You might think he gets to go home, put the ball in some kind of protective box, stick it up on his mantel or drop it into his safety deposit box so he can show his kids and grandkids in his later years. Probably have a scrapbook with his picture in it holding up the ball and smiling for the entire world to see. That’s what I think he would do, don’t you?
Sure, that makes sense…but wait, there’s more to this story isn’t there?
You bet there is.
See, I bet when Mr. Williams caught that ball, the last thing on his mind was the question… “How much is a tax attorney going to cost me?”
Because that’s what Mr. Williams needs the next day. One tax attorney says… “When he took possession of the ball and it was his ball, it was income to him based on its value as of yesterday.” Basically what that means is that Mr. Williams jumps into the 35% tax bracket whether he likes it or not. Most sports people in the know estimate that a ball like this is worth about $500,000 if it was put up for auction.
So what does this mean to Mr. Williams?
Well, for one, it means at the end of the year Mr. Williams is looking at a tax bill of about $210,000 if the ball sold for $600,000.
But wait, Mr. Williams doesn’t want to sell the ball, he just wants to keep it and show it to his kids and his grandkids.
Too bad, the IRS says he would still owe taxes on the reasonable value of the ball, whatever that might be.
So what if he doesn’t have the money for the tax and just wants to keep the ball….sorry Charlie, he either pays or sells it…no other option.
So I guess if my grand pappy dies and leaves me a ranch somewhere then I have to pay the tax that’s due on it or sell it? Looks that way, doesn’t it?
I suppose if you were walking down the beach and stumbled upon a magic lantern and a genie popped out you’d have to pay tax on this as well, wouldn’t you? How would they value a magic genie in the first place? I bet the IRS could do it if they had to. I don’t think they cut you much slack. Years ago I heard that the IRS took over a house of ill repute in Nevada and had a hard time placing a value on some of the assets that were on the property. Some of the assets being the female employees.
I don’t recall the exact outcome of this, but it seems to me that the IRS actually did a depreciation schedule based upon the ages of the assets in question. Who knows if this was true or not, but I suppose it could have happened.
Anyway, I guess the lesson to be learned here is that if you are going to the ball game you should avoid catching the big one…if you want to avoid being thrown into a higher tax bracket. Of course you could just tell them you’re someone else and just make up a name….
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