Q. Did they use different balls for Jeter so they could identify the REAL baseball, like they did with Bonds ?
Fan the caught #3000 for Jeter...NOW may get taxed for the good deed!
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Once again, RECIPIENTS do not pay taxes on gifts. If children earn interest/investment income on their gift, they obviously have to pay taxes on that. Your link deals with when the parents have to file a gift tax return and the rate at which the child's investment income is taxed.
As a lawyer, you probably know better than me, but I thought there was a ceiling on that "not paying taxes on gifts" thingy. I heard that you don't pay taxes on gifts.... ONLY IF they amount to less than $10k.
As long as its a gift (and not disguised compensation or something else), you as the recipient will not owe taxes. If the gift is a capital asset, the recipient will have to pay capital gains when he/she sells the property.
But isn't all the stuff he's getting compensation for the baseball? If so, then he's liable for taxes on the value of the stuff (minus $8 for the physical value of the ball).
It will be interesting to see if the IRS wants to consider it "income." Its not really compensation as there was no work performed. It may fall under the catch-all of "other income." There's literally 1000s of pages of revenue rulings discussing what is income and what isn't. My gut says this gets classified as a gift, but Uncle Sam could use the $$$, so you never know.
If I'm not mistaken, the ball is a $8 gift to Jeter. If he were to sell it for $100, he'd owe taxes on $92.
But they gave him lots of stuff in exchange for that ball. That's why I think the IRS will consider it payment for the ball, as otherwise he would not have recieved it.
I have too much humility to ever call myself an expert at anything, and I certainly am capable of being mistaken, but I have more education dealing with the federal tax code than probably 99% of the US population.
Recipients of gifts do not have to pay taxes on the gift - - they only have to pay tax on any income the gift generates or capital gains tax if the gift is sold. Gifts are not income and the gift tax only applies to the donor.
Lol. It's true and I sure don't blame anyone for not knowing the ins and outs of the crazy tax code.
It's true. Skyhi is right, and my post was flat wrong. I looked it up, and am quite embarrassed that my memory on gift taxes was so wrong- the exact opposite of what I "remembered."
Lol! All that matters is what the IRS says it's basis is at the time of transfer. IIRC, they'll use an $8 basis. It makes sense because if (and I know it will never happen) Jeter sells it for $1,000,000, he'll owe capital gains taxes on $999,992.
Obviously I know the ball is worth more than $8.
Obviously I know the ball is worth more than $8.
