[Rumor]

College student who caught Bonds ball tells 'Today' he may not sell - MLB - Yahoo! Sports

I know that if you win something on a gameshow or a raffle, you will be held responsible for the taxes for the item. However, I never knew this applied to a record breaking homerun ball.

NEW YORK (AP) -- Matt Murphy could become $500,000 richer if he sells Barry Bonds' record-breaking home run ball.

The college student, however, may just want to hang on to it -- even if he's hit with a whopping tax bill.

"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."

Selling the ball for that amount would instantly put Murphy 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 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.

Murphy said he and his friend, Amir Kamal, nearly missed Bonds' historic at-bat because they were getting crab sandwiches at AT&T Park.

"We were back in time," Murphy said. "We hustled."

They attended the game because they had a layover in San Francisco on the way to Australia. A third friend, Ryan Breslin, is the brother of Abigail Breslin, the young actress who received an Oscar nomination for her role in "Little Miss Sunshine," and she's shooting a movie in Australia.

Murphy and Kamal bought Giants tickets about three weeks before the game as they were planning the Australia trip.

"Well, it started off, 'Let's spend the night in San Francisco,' to 'Let's go to a Giants game,' to 'He's getting pretty close, what if?"' Murphy said.

Breslin turned down an invitation to attend the game because he was finishing up classes in Washington, D.C. Is he kicking himself for that decision?

"I absolutely am," he said.

Also feeling pangs of regret must be the San Francisco cab driver who drove Murphy and Kamal from the airport to their hotel. Hoping to get out of the $55 fare, they told the driver that if they caught Bonds' record home run ball, they'd give him a couple thousand dollars.

"He turned me down, man," Murphy said.

Bonds passed Hank Aaron to become the majors' career home run hitter when he hit the 756th of his career into the right-center field seats on Tuesday night against the Washington Nationals. After the ball whizzed past Kamal, he turned around to high-five Murphy, but his friend had disappeared.

The ball "took a lucky bounce," Murphy said, and set off a scrum -- with him at the bottom.

"Longest minute of my life," Murphy said. "I think one gentleman kicked me in the back of the head. There were people on top of people on top of people, which I didn't really understand. The San Francisco Police Department really helped me out by getting there quickly."

Murphy wore the jersey of Mets All-Star shortstop Jose Reyes to the game.

"Just had to represent my home team," he said.

But after making the catch, he asked the grounds crew for some Giants gear, thinking he might face some malice for wearing a Mets jersey.

Murphy declined to reveal where he's keeping the ball, but said it's not coming to Australia with him.

"When I get back, I'm going to sort things out," he said.

Funny thing is: He is a Mets fan.

[Dork.]

We've been talking about it here:

http://forums.macnn.com/89/macnn-lou...cord-will-come

I find it absurd that he would be effectively forced to sell it by the IRS. He should be able to donate it to the Hall of Fame, and claim a deduction for the price of the ball if he had bought it in the souvenier shop.

And what's so funny about Mets fans?

[Dakarʒ]

He should have to pay taxes when he sells it, not before.

[Jawbone54]

Say hello to the U.S. tax system.

NONE of it makes any sense.

[Brien]

I did not know you had to pay taxes in that manner. Lame.

[SVass]

My suggestion is to hold it for 18 months and then sell it claiming the increase from its nominal $1 value is capital gains income and thus pay only 15% or whatever the rate will be (or sell it for time payments and spread the income out over a few years reducing the tax rate). sam

[design219]

Hey, he won the lottery. You pay taxes on winnings. If he won a car on a game show he would pay taxes.

I not saying I like it, but it does makes sense.

[Jawbone54]

In the lottery, you win an amount of cash.

This guy caught a baseball. It's WORTH money, but it has yet to be translated into cash. So does he get taxed for its worth now, when he sells it, or both?

[wallinbl]

Originally Posted by Jawbone54 

This guy caught a baseball. It's WORTH money, but it has yet to be translated into cash. So does he get taxed for its worth now, when he sells it, or both?

I believe he has to pay taxes on its value now, and then pay taxes on the gain or loss when he sells it. So, if it's worth $500K - he pays taxes on that now. If he sells for $600K, he pays taxes on the gain of $100K. If he sells for $400K, he reduces his taxes because of the $100K loss.

[Rumor]

Originally Posted by Dork. 

We've been talking about it here:

http://forums.macnn.com/89/macnn-lou...cord-will-come

I find it absurd that he would be effectively forced to sell it by the IRS. He should be able to donate it to the Hall of Fame, and claim a deduction for the price of the ball if he had bought it in the souvenier shop.

And what's so funny about Mets fans?

I half expected the person that caught the ball to be a Giants fan. I'm sure many of the Giants fans were pissed.

[Jawbone54]

Originally Posted by Rumor 

I half expected the person that caught the ball to be a Giants fan. I'm sure many of the Giants fans were pissed.

For this reason, I'm so glad a Mets fan caught it!

[finboy]

Originally Posted by wallinbl 

I believe he has to pay taxes on its value now, and then pay taxes on the gain or loss when he sells it. So, if it's worth $500K - he pays taxes on that now. If he sells for $600K, he pays taxes on the gain of $100K. If he sells for $400K, he reduces his taxes because of the $100K loss.

I can't imagine that it's taxable as it is. That would be insane. Even if he has it insured for $500k, that doesn't generate a tax consequence. Or I should say it would be the first time I've ever heard of it happening, and I do this finance stuff for a living. May be some special provision of the tax code that I've never heard of or seen before. Either the tax lawyer is mistaken, or he was too busy thinking about getting quoted in the media.

More ambiguity, more urban legend stuff:

New Yorker to sell Bonds' record home run ball in online auction

[Dork.]

Originally Posted by finboy 

I can't imagine that it's taxable as it is. That would be insane. Even if he has it insured for $500k, that doesn't generate a tax consequence. Or I should say it would be the first time I've ever heard of it happening, and I do this finance stuff for a living. May be some special provision of the tax code that I've never heard of or seen before. Either the tax lawyer is mistaken, or he was too busy thinking about getting quoted in the media.

Go read my other thread, it has a few links to some informed opinions on the matter. They agree with the sentiment in the linked article: a case can be made either way, and nobody's really sure how the IRS would interpret it. Unless he finds a professional willing to defend him in an audit, the lowest risk option is to cash out.

[finboy]

Originally Posted by Dork. 

Unless he finds a professional willing to defend him in an audit, the lowest risk option is to cash out.

From all the difference of opinion out there, sounds like he may have to sell it and pay capital gains taxes to be safe. Or, if he didn't want to be such a big baby about it, he could just give it back to MLB or Barry Bonds and he wouldn't owe a thing. It's doubtful that the IRS would come after him after what happened in 1998.

[rickey939]

Bonds? Yuck...throw it in the trash.

[Doofy]

Easy way around this if he wants to keep it.

Sell it to a friend for a dollar. Buy it back for £1.50.

Unless there's some kind of law which states that you must sell your goods for whatever the government thinks they're worth. No, didn't think so.

[Cold Warrior]

If that were the case, every one would do it. I'm sure there's a rule somewhere.

[rickey939]

Originally Posted by rickey939 

Bonds? Yuck...throw it in the trash.

Great idea. Claim it as a loss from the insurance company....

[Laminar]

Originally Posted by Doofy 

Easy way around this if he wants to keep it.

Sell it to a friend for a dollar. Buy it back for £1.50.

Unless there's some kind of law which states that you must sell your goods for whatever the government thinks they're worth. No, didn't think so.

That would be funny if his friend was a jerk about it and kept it...

[Rumor]

Originally Posted by rickey939 

Originally Posted by rickey939 

Bonds? Yuck...throw it in the trash.

Great idea. Claim it as a loss from the insurance company....

Conversing with yourself?

[design219]

Originally Posted by Doofy 

Sell it to a friend for a dollar. Buy it back for $1.50.

Unless there's some kind of law which states that you must sell your goods for whatever the government thinks they're worth. No, didn't think so.

People dealing in real estate go to jail for stunts like that. I don't think a sale price would matter to the IRS*.

*bastards

[Doofy]

Originally Posted by design219 

People dealing in real estate go to jail for stunts like that. I don't think a sale price would matter to the IRS*.

*bastards

What the hell kind of commie country are you living in?

[design219]

Good question.

Boggles the mind sometimes.

[Eriamjh]

He won't have to pay the taxes on it until he sells it. This has happened before.

[Cold Warrior]

So how do you reconcile that with all the articles in the news saying he's going to be taxed now simply by owning it?

[Eriamjh]

Originally Posted by Cold Warrior 

So how do you reconcile that with all the articles in the news saying he's going to be taxed now simply by owning it?

Because the same thing happened when the someone caught McGuire's ball. The IRS backed off.
From this site:

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.

Some great replies on this accounting site.

And I especially like this one:

For those of you that think it catching the ball is a taxable event, do you think that everyone else sitting in that section of the stands suffered a taxable loss for having not gotten the ball?

I do not believe that the IRS taxed the guy who caught McGuire's ball until it was sold, which, by the way, was for $3.3 million.