Accumulating 3,000 base hits during a major league baseball career is a rare accomplishment indeed. Going into the 2011 season only 27 ballplayers have been able to enter the 3,000 hit club. With this in mind, all eyes in the baseball world have been on Derek Jeter this year as he has zeroed in on 3,000 career hits.
On Saturday, July 9th Jeter laid into a third inning David Price pitch and drove it into the left-field bleachers at Yankee Stadium for his 3,000th base knock. He became just the fourth player who played most of his career as a shortstop to achieve the feat. The others were Honus Wagner, Cal Ripken Jr., and Robin Yount.
As luck would have it a fan seated in the left-field bleachers, 23-year-old Christian Lopez, wound up with the historic baseball. Experts estimate that the ball was worth $250,000, but of course the actual worth would depend on what someone was willing to pay for it. There are those who say that the ball would have sold for $1 million or more. But we will never know, because although Lopez was the legal owner of the baseball and all of its potential value, he gave it away to the Yankees, asking nothing in return.
Jeter certainly doesn’t play for free, and Yankee tickets are mighty expensive, so there are those who would say that Lopez’ charity was misdirected, but that is another matter. What we would like to look at here today is the fact that the Yankees gave Lopez valuable season tickets for the rest of this year along with some relatively trivial memorabilia to say thanks for the ball. Estimates place the value of these items at about $120,000. This may be construed as income by the IRS, and CNN is reporting that the tax liability that Lopez may face as a result of this income could be as much as $14,000. This money would have to be paid out of his pocket.
Without judging the actions of Mr. Lopez, from a financial perspective it is always going to be wise to consult with a financial planning attorney before agreeing to a transfer of assets that could have significant tax implications. This situation serves as a poignant reminder.
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.