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Catching a
Problem
by Peary Perry |
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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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