Tax Consequences to Fan Catching Derek Jeter's 3,000th Hit

Don't Mess With Taxes, Tax Implications of Derek Jeter's Historic 3,000th MLB Hit:

Christian Lopez, who was celebrating his 23rd birthday at new Yankees Stadium Saturday afternoon, gave the historic baseball to Jeter....

The good news for Lopez, aside from retrieving Jeter's hit and seeing his team win, is that he didn't leave empty-handed.

The Yankees gave Lopez four Champions Suite season tickets for the team's remaining home games, including playoff appearances. He also got front-row seats for today's game, as well as three bats, three balls and two number 2 jerseys, all signed by Jeter.

The bad news is that Lopez should shell out some bucks to talk with a tax specialist about the possible tax implications of the goodies he got from the Yankees.

Is the value of the expensive Yankees Stadium seating taxable the way prize winnings typically are? In a somewhat similar situation several years ago, MLB players and coaches (and other professional athletes) were hit with tax bills on the complimentary tickets they gave to family and friends.

What about the team paraphernalia Lopez got? Is it taxable immediately at its fair market value, or only at capital gains rates if he decides to sell any of it?

Or could the items be considered, for the recipient's purposes, tax-free gifts? Is there a corresponding gift exemption for corporations like the current $13,000 limit available to generous individuals?

And if there are taxes due, how strict will the IRS and the notoriously aggressive Empire State tax department be in trying to get their cuts? Will they let it slide rather than face the bad PR that's sure to ensue? Should they give Lopez a tax break here?

Tax attorneys, accountants and sports fans, what's your take? Will Lopez's moment in baseball history cost him at tax filing time?

For the answers, see:

• Joseph M. Dodge, Accessions to Wealth, Realization of Gross Income, and Dominion and Control:  Applying the "Claim of Right Doctrine" to Found Objects, Including Record-Setting Baseballs, 4 Fla. Tax Rev. 685 (2000)
• J. Gordon Hylton, The “Who Owns the Baseball” Issue Just Will Not Go Away (Oct. 8, 2009)
• Lawrence M. Zelenak & Martin J. McMahon, Jr., Taxing Baseballs and Other Found Property, 84 Tax Notes 1299 (1999)
• Ball Busters: How the IRS Should Tax Record-Setting Baseballs and Other Found Property Under the Treasure Trove Regulation, 33 Vt. L. Rev. 43 (2008)

Related TaxProf Blog coverage:

• Tax Consequences of Catching Barry Bonds' 756th Home Run (July 25, 2007)
• More on Tax Consequences to Fan Catching Barry Bonds' 756th Home Run (Aug. 9, 2007)
• More on Tax Consequences to Fan Catching Barry Bonds' 756th Home Run (Aug. 23, 2007)
• The Taxation of Record-Setting Baseballs (Dec. 27, 2008)
• The Tax Consequences of Catching Home Run Baseballs (Apr. 11, 2009)
• Tax Consequences of A-Rod's 600th Home Run (Aug. 5, 2010)