Post by charlesingalls42 on Aug 10, 2007 15:07:44 GMT -5
sports.yahoo.com/mlb/news?slu...v=ap&type=lgns
By MARCUS WOHLSEN, Associated Press Writer
August 8, 2007
SAN FRANCISCO (AP) -- Before he celebrates his windfall, the New York Mets fan who emerged from a violent scrum clutching Barry Bonds' record-setting home run ball should probably call his accountant.
As soon as 21-year-old Matt Murphy snagged the valuable piece of sports history Tuesday night, his souvenir became taxable income in the eyes of the Internal Revenue Service, according to experts.
"It's an expensive catch," said John Barrie, a tax lawyer with Bryan Cave LLP in New York who grew up watching the Giants play at Candlestick Park. "Once he took possession of the ball and it was his ball, it was income to him based on its value as of yesterday,"
By most estimates, the ball that put Bonds atop the list of all-time home run hitters with 756 would sell in the half-million dollar range on the open market or at auction.
That would instantly put Murphy, a college student from Queens, in the highest tax bracket for individual income, where he would face a tax rate of about 35 percent, or about $210,000 on a $600,000 ball.
Even if he does not sell the ball, Murphy would still owe the taxes based on a reasonable estimate of its value, according to Barrie. 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.
Not everyone concurs on Barrie's interpretation of the intersection between professional sports and the nation's tax code.
But for its part, the IRS seems reluctant to clear up the confusion. With six-figure treasures so rarely falling out of the sky, the agency declined to comment Wednesday on what regulations would apply and whether they would be enforced in the case of the Bonds ball.
History does not provide much of a guide since most fans who have been lucky enough to snag previous long balls have chosen to sell their mementos. And at least one ball was as much a source of embarrassment for the IRS as revenue.
As Mark McGwire chased the mark for most home runs in a season in 1998, IRS officials initially said the ball that broke Roger Maris' long-standing record could be subject to taxes even if it were returned to McGwire. The statements were ridiculed by politicians and quickly disavowed by the agency's top brass.
"All I know is that the fan who gives back the home run ball deserves a round of applause, not a big tax bill," then-IRS Commissioner Charles Rossotti said at the time.
Ultimately, Tim Forneris, a member of the St. Louis Cardinals grounds crew, recovered McGwire's 62nd home run ball. He turned it over to the Cardinals and received a trip to Disney World and a minivan in return.
Phil Ozersky, a Cardinals season-ticket holder, caught McGwire's 70th homer later that season and sold it in 1999 to comic book artist Todd McFarlane for $3 million.
A spokeswoman for the Giants said that as with any ball that enters the stands at AT&T Park, Bonds' 435-foot drive into the right-center field stands belonged to the person who caught it, so the team wouldn't seek its return. Bonds said he also had no interest in retrieving it.
Murphy, who went to the game during a layover from a flight to Australia, grew up near Shea Stadium and was wearing a Mets jersey when he made the charmed grab.
He told the New York Daily News he planned to keep 51 percent of the proceeds from the sale of the ball and would give the rest to his friend, Amir Kamal, 21, of New York, who was also at the game.
"I won the lottery," he told the newspaper. "I'm going to be smart about what I do with it."
By MARCUS WOHLSEN, Associated Press Writer
August 8, 2007
SAN FRANCISCO (AP) -- Before he celebrates his windfall, the New York Mets fan who emerged from a violent scrum clutching Barry Bonds' record-setting home run ball should probably call his accountant.
As soon as 21-year-old Matt Murphy snagged the valuable piece of sports history Tuesday night, his souvenir became taxable income in the eyes of the Internal Revenue Service, according to experts.
"It's an expensive catch," said John Barrie, a tax lawyer with Bryan Cave LLP in New York who grew up watching the Giants play at Candlestick Park. "Once he took possession of the ball and it was his ball, it was income to him based on its value as of yesterday,"
By most estimates, the ball that put Bonds atop the list of all-time home run hitters with 756 would sell in the half-million dollar range on the open market or at auction.
That would instantly put Murphy, a college student from Queens, in the highest tax bracket for individual income, where he would face a tax rate of about 35 percent, or about $210,000 on a $600,000 ball.
Even if he does not sell the ball, Murphy would still owe the taxes based on a reasonable estimate of its value, according to Barrie. 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.
Not everyone concurs on Barrie's interpretation of the intersection between professional sports and the nation's tax code.
But for its part, the IRS seems reluctant to clear up the confusion. With six-figure treasures so rarely falling out of the sky, the agency declined to comment Wednesday on what regulations would apply and whether they would be enforced in the case of the Bonds ball.
History does not provide much of a guide since most fans who have been lucky enough to snag previous long balls have chosen to sell their mementos. And at least one ball was as much a source of embarrassment for the IRS as revenue.
As Mark McGwire chased the mark for most home runs in a season in 1998, IRS officials initially said the ball that broke Roger Maris' long-standing record could be subject to taxes even if it were returned to McGwire. The statements were ridiculed by politicians and quickly disavowed by the agency's top brass.
"All I know is that the fan who gives back the home run ball deserves a round of applause, not a big tax bill," then-IRS Commissioner Charles Rossotti said at the time.
Ultimately, Tim Forneris, a member of the St. Louis Cardinals grounds crew, recovered McGwire's 62nd home run ball. He turned it over to the Cardinals and received a trip to Disney World and a minivan in return.
Phil Ozersky, a Cardinals season-ticket holder, caught McGwire's 70th homer later that season and sold it in 1999 to comic book artist Todd McFarlane for $3 million.
A spokeswoman for the Giants said that as with any ball that enters the stands at AT&T Park, Bonds' 435-foot drive into the right-center field stands belonged to the person who caught it, so the team wouldn't seek its return. Bonds said he also had no interest in retrieving it.
Murphy, who went to the game during a layover from a flight to Australia, grew up near Shea Stadium and was wearing a Mets jersey when he made the charmed grab.
He told the New York Daily News he planned to keep 51 percent of the proceeds from the sale of the ball and would give the rest to his friend, Amir Kamal, 21, of New York, who was also at the game.
"I won the lottery," he told the newspaper. "I'm going to be smart about what I do with it."
