When he caught Aaron Judge’s record-breaking 62nd home run on Tuesday night at Globe Life Field in Arlington, Texas, Cory Youmans might have bagged a six-figure tax bill.
Whatever the vice president of Fisher Investments decides to do with the legendary ball—whether to gift it to Judge and the New York Yankees, keep it for himself, or sell it for possibly millions of dollars—will determine its future. JP Cohen, the president of Memory Lane, told the New York Post that the ball has at least $2 million in value.
According to media reports from Tuesday night, the Dallas man is still undecided. Bri Amaranthus, a sports reporter and previous contestant on “The Bachelor,” is married to Youmans.
MANAGE THE BALL Both the infield fly rule and the tax regulations on caught balls are unclear. A ball may be taxed both when it leaves the stadium and when it is sold by the spectator who grabbed it, according to the IRS, which declined to comment. The only thing the service has stated is that fans are not taxed on balls returned to the club.
A ball catch, according to some tax experts, is a taxable event. They use the Cesarini v. United States case from 1969 as an example. An ancient piano was discovered to contain $4,467, which a federal judge ruled was a taxable “windfall” similar to winning a prize.
Kathy Pickering, the top tax officer at Handamp;R Block, disagrees.
She told FOX Business that as long as a fan keeps a home run ball from a record-breaking game or a player’s 600th home run, for example, they usually won’t have to pay taxes on it.
If you keep the ball until you pass away, your estate might be subject to tax, but according to Pickering, that only applies if your estate exceeds $12.06 million.
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PURCHASING THE BALL A single taxpayer or a married couple would probably fall into the highest 37% tax bracket if they sold a ball for $2 million.
Your marital status, the size of your family, your income and deductions, as well as how long you held the ball, would all affect the real tax. A reduced capital gains tax rate is available if you hold onto the ball for more than a year, but the IRS has a specific tax rate for “collectibles.”
A ball may be regarded as a collectible if the game has historical significance, Pickering told FOX Business.
“If the ball is held for a longer period than a year, a 28% capital gains tax will be due on it. Ordinary income rates will be applied to the sale if the holder maintains the ball for less than a year “She spoke. Depending on one’s income, the usual capital gains rate ranges from 0% to 15% to 20%.
GIVING THE TEAM THE BALL
A Memorabilia Expert Says That Aaron Judges’ 62nd Home Run Ball Will Be More Valuable Than Albert Pujols’ 700th
When Mark McGwire, a first baseman for the St. Louis Cardinals, tied Roger Maris’ 1961 home run record in 1998, the issue of taxing baseballs came up. A sportswriter enquired with the IRS on the tax liability of Mike Davidson, the fan who caught McGwire’s record-tying 61st home run.
According to an IRS representative, Davidson was required to pay gift tax since he intended to give McGwire the ball. The White House and all levels of government criticized the speech harshly. At the time, Mike McCurry, the press secretary for President Bill Clinton, described it as “probably the dumbest thing I’ve ever heard in my life.”
Pickering claims that the IRS erred: “The IRS states that returning the ball is more like returning unwanted items than providing a gift, even if sending it back to the team would appear to be a gift and subject the sender (the fan) to potential gift tax if the value is over $16,000. Giving a ball back in such situation is probably not going to result in any taxable events for the fan.”
The IRS quickly backed down determined that no tax was owed.
Charles Rossotti, the IRS Commissioner at the time, stated that “parts of the tax code can often be as difficult to understand as the infield fly rule.”
HOW ABOUT BENEFITS? Fans who return vintage game balls are frequently rewarded by teams. In 2015, Alex Rodriguez’s 3,000th career hit was caught by Zack Hample, who then handed it to the New York Yankees. In return, the group gave Hample’s preferred charity $150,000. Additionally, he received two autographed bats, a jersey, and tickets.
Season tickets for fans, as well as other goods like signed jerseys or balls, would be taxable, just like other awards, warns Pickering.
Your father’s sports memorabilia collections are no more.
CHARITY DONATIONS What if you just give the ball to yourself or the Baseball Hall of Fame as a donation? Do you qualify for a deduction?
Yes, however the amount you can deduct annually is capped by the IRS based on your income. Any non-deductible donation can be carried over for five years before being lost, which may make it challenging to deduct a multimillion dollar ball. Pickering suggests consulting a tax professional before making a sizable charity donation.
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She points out that if the ball is donated to charity and its value exceeds $5,000, an evaluation would be necessary.
“An appraisal might be a terrific idea, to assess the donative value for the ball, if the fair market value is unknown or controversial,” she said, adding that an appraisal could be useful in setting a sales price.