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Swoboda4
07-25-2011, 07:40 AM
If it's understood that Christian Lopez has to pay taxes on the unasked for gifts received from the Yankees,why doesn't Derek Jeter have to pay taxes on receiving a ball/gift that is worth arguably anywhere from $25,000 on up?

OaklandAsFan
07-25-2011, 08:13 AM
who knows if he does or not and in reality he makes so much money each year that an additional few thousand would hardly make a dent.

Actually I don't know if they can really tax him because there is no "tangible" worth to the ball. The tickets that the kid got have a value on them but the baseball just has estimates of what it may sell for but not real actual known value.

Doodles
07-25-2011, 12:40 PM
The gift GIVER pays the tax, per IRS code:

http://www.irs.gov/businesses/small/article/0,,id=108139,00.html#1

So the kid should pay...Jeter is clear (ironic, isn't it). I posted similarly in the other thread. Here is what should happen IMO:

Jeter pays $100K...the NY Yankess pay $50K...Ford pays $50K...Steiner pays $25K...Modells pays $25K. That's $250K for the kid, Derek owns the ball. The kid pays tax on it, but that's life...he'll pocket a good amount of money and can continue his endorsement deals.

xpress34
07-25-2011, 03:38 PM
Actually I don't know if they can really tax him because there is no "tangible" worth to the ball. The tickets that the kid got have a value on them but the baseball just has estimates of what it may sell for but not real actual known value.

Then by that point of view, the kid should only be taxed on the tickets and possibly the UNSIGNED retail value of the bats and jerseys and balls as they have no more tangible value than the home run ball.

If you argue that AUTO Jeter Jerseys sell for $xxx and give them tangible value, then you could argue that historic HR balls have sold for $xxx and give the ball tangible value as well.

As far as the Gift GIVER paying the taxes, that is always the way I understood it.

A friend whose family was somewhat well off always gave the kids (4 of them) $9,999.00 each year ($10,000 is or was the break point) that no one (giver or receiver) had to pay taxes on. If the gift was over $10,000, BOTH parties were taxed. That might be different now - that was in the 1980's...

If it is straight up the GIVER paying the taxes, and if the ball has 'tangible' value whose to say who might turn out better on the tax issue here?

Finally, to the original OP question - YES. Why should he be any different from any of the rest of us?

And one more thing to ponder - yes, the taxes normally fall upon the giver... BUT, if you WIN a Prize (not a gift) YOU as the winner are liable for all taxes related to the prize! And these items were not prizes given to him, but gifts....

xpress34
07-25-2011, 03:49 PM
The gift GIVER pays the tax, per IRS code:

http://www.irs.gov/businesses/small/article/0,,id=108139,00.html#1


Who pays the gift tax?
The donor is generally responsible for paying the gift tax. Under special arrangements the donee may agree to pay the tax instead. Please visit with your tax professional if you are considering this type of arrangement.

What is considered a gift?
Any transfer to an individual, either directly or indirectly, where full consideration (measured in money or money's worth) is not received in return.

What can be excluded from gifts?
The general rule is that any gift is a taxable gift. However, there are many exceptions to this rule. Generally, the following gifts are not taxable gifts.

What other information do I need to include with the return?
Refer to Form 709 (PDF), 709 Instructions and Publication 950. Among other items listed:

Copies of appraisals.
Copies of relevant documents regarding the transfer.
Documentation of any unusual items shown on the return (partially-gifted assets, other items relevant to the transfer(s)).

What is "Fair Market Value?"
Fair Market Value is defined as: "The fair market value is the price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts. The fair market value of a particular item of property includible in the decedent's gross estate is not to be determined by a forced sale price. Nor is the fair market value of an item of property to be determined by the sale price of the item in a market other than that in which such item is most commonly sold to the public, taking into account the location of the item wherever appropriate." Regulation §20.2031-1.


The above are directly from the Tax Code Link which Doodles provided.

Using the IRS' own language, one could reasonably argue that the 'Fair Market Value' of the ball was what the Yankees offered to Christian and therefore does not meet the rule for being a GIFT in either direction - simply a trade of properties - in which FULL CONSIDERATION was Received on both sides.

Just my .02

- Smitty