I just thought you were a man of your word...

 

I am...I said I was off the thread, and I was...

1. It is different.

2. Not correct.

3. Reasonable appraisal. You will use yours, government will use theirs, then you negotiate.

4. 100% true.

5. Yes. However most wouldn't report it. IRS knows this guy has that baseball.

6. The appraisal. Gov't would disallow the transaction as bogus.

7. Something everyone can agree on.

Please explain the difference? Other then one is worth $50,000,000 and one is worth $500,000

What??? Sports memorabilia are appraised every day...and you don't have to sell it for it to have value, lol...

 

Here is the right answer. It came from a Wall Street Journal blog...again, real simple...and then I'm off of this thread...

 

 

 

1. The fan has an income (windfall under section 61) at the moment she catches the ball and takes the ownership of it, and not when she sells it.

Section 61 deals with the definiton of gross income, it lists 15 specific items:

 

(1) Compensation for services, including fees, commissions, fringe benefits, and similar items;

(2) Gross income derived from business;

(3) Gains derived from dealings in property;

(4) Interest;

(5) Rents;

(6) Royalties;

(7) Dividends;

(8) Alimony and separate maintenance payments;

(9) Annuities;

(10) Income from life insurance and endowment contracts;

(11) Pensions;

(12) Income from discharge of indebtedness;

(13) Distributive share of partnership gross income;

(14) Income in respect of a decedent; and

(15) Income from an interest in an estate or trust.

 

Prizes and awards are discussed in section 74.

 

Windfalls are only mentioned once in the code, and that having to do with annuities.

 

But since you obviously know more than me about taxes, I'll leave the thread to your expertise.

Please explain the difference? Other then one is worth $50,000,000 and one is worth $500,000

 

The ticket is a worthless piece of paper by itself. It ENTITLES you to something (money). Just like a food coupon that entitles you to something (money in the form of savings) but states that the piece of paper is worth a millionth of a cent. You don't have to do anything for the baseball to be worth a lot.

 

BTW, the IRS doesn't know who has the lottery ticket and couldn't tax it anyway until it is cashed. They know who has the baseball.

The ticket is a worthless piece of paper by itself. It ENTITLES you to something (money). Just like a food coupon that entitles you to something (money in the form of savings) but states that the piece of paper is worth a millionth of a cent. You don't have to do anything for the baseball to be worth a lot.

 

BTW, the IRS doesn't know who has the lottery ticket and couldn't tax it anyway until it is cashed. They know who has the baseball.

You have to sell it for it to be worth something.

 

Are you saying you couldn't sell the $50,000,000 lottery ticket for $10,000,000?

Catching the ball is like winning the lottery. You would tax those people, wouldn't you?

 

Upon receiving their check, yep.

Beautiful gesture.

 

He's still 100% responsible for the taxes.

I never said he wasn't responsible for the taxes.:sssh:

Section 61 deals with the definiton of gross income, it lists 15 specific items:

 

(1) Compensation for services, including fees, commissions, fringe benefits, and similar items;

(2) Gross income derived from business;

(3) Gains derived from dealings in property;

(4) Interest;

(5) Rents;

(6) Royalties;

(7) Dividends;

(8) Alimony and separate maintenance payments;

(9) Annuities;

(10) Income from life insurance and endowment contracts;

(11) Pensions;

(12) Income from discharge of indebtedness;

(13) Distributive share of partnership gross income;

(14) Income in respect of a decedent; and

(15) Income from an interest in an estate or trust.

 

Prizes and awards are discussed in section 74.

 

Windfalls are only mentioned once in the code, and that having to do with annuities.

 

But since you obviously know more than me about taxes, I'll leave the thread to your expertise.

 

Section 61 defines gross income...means all income from whatever source, except by those items specifically excluded by the code.

You listed the 15 of the "more common" types.

For instance "treasure trove", and "buried treasure" are listed in CCHs checklists related to that section.

 

CCH also states "Although nearly every type of accession to wealth (except gifts and inheritances) appears to fall within this comprehensive definition, income items should be checked against the specific exclusions..." in the Code.

 

The authors cite is correct and his use of the word "windfall" in no way makes his analysis the least bit incorrect...

 

As for the last line of your post, no need to get testy...reasonable people can disagree...

You have to sell it for it to be worth something.

 

 

No you dont. If I win a 125 foot yacht and dont sell it, is it worthless??? Will the bank give me a loan against its value???

I am officially through now...I realize people will be split 50/50 on this issue, as they are on just about every issue these days...

 

There is probably no black or white here, only a whole bunch of gray.

I am officially through now...I realize people will be split 50/50 on this issue, as they are on just about every issue these days...

 

There is probably no black or white here, only a whole bunch of gray.

 

 

the vote is not split.

 

26 NO

10 YES

No you dont. If I win a 125 foot yacht and dont sell it, is it worthless??? Will the bank give me a loan against its value???

Apples and onions.

 

You would pay tax on what ever yachts sell for every day. That baseball sells for $3.00 (or what ever they cost) at Wal-Mart. If the IRS charges this guy tax on $3.00 then ok.

the vote is not split.

 

26 NO

10 YES

 

The tax lawyers are split in the other direction, so that makes it 50/50.

Apples and onions.

 

You would pay tax on what ever yachts sell for every day. That baseball sells for $3.00 (or what ever they cost) at Wal-Mart. If the IRS charges this guy tax on $3.00 then ok.

 

Barry Bonds' record breaking home run ball sells for $3 at Wal-Mart every day???

I'm trying to show restraint here. Come on.

Barry Bonds' record breaking home run ball sells for $3 at Wal-Mart every day???

I'm trying to show restraint here. Come on.

I'm back.

 

Who gets to pick the appraiser? The IRS or the taxpayer? Personally, I'd pick about 5 of them and take the appraisal that has the lowest amount on it. If the IRS wants to fight my value, they can pay for their own appraiser.