Wed, Jul 13, 2011 page19

• Fan’s historic catch may land him a tax bill

  • NT Times News Service, NEW YORK
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  Here is the fan’s fantasy: You go to the ballpark and under a picture-perfect sky not only do the Yankees win, but in recognition of your exemplary behavior, the team also showers you with free season tickets, signed merchandise and a personal audience with the Yankee-est of Yankees, Derek Jeter. The team president hands you his card, with his e-mail address.

  And here is the reality: The taxman may own a piece of your windfall. And not in tickets, either. He only takes cash.

  For Christian Lopez, the 23-year-old fan who came up with Derek Jeter’s historic 3,000th hit at Yankee Stadium on Saturday, the ramifications of his gift from above are as American as baseball, hot dogs and taxes.

  

  Derek Jeter, right, of the New York Yankees shakes hands with Christian Lopez, the fan who caught the ball he hit against the Tampa Bay Rays for his 3,000th career hit, at a news conference after their game in New York on Saturday.

  Photo: Reuters

  As in Las Vegas, the house always wins.

  “There’s different ways the IRS could try to characterize a ball caught by a fan in the stands,” said Andrew Appleby, a tax associate at the Sutherland Asbill & Brennan law firm in New York who has written about the tax implications of souvenir baseballs. “But when the Yankees give him all those things, it’s much more clear-cut that he owes taxes on what they give him.”

  Lopez, of Highland Mills, New York, was seated with his father, Raul, in the left field stands when Jeter drove a 3-2 curveball over the wall. The ball bounced off Raul Lopez’s hands and rolled to the floor, where his son, a former defensive tackle in college, pounced on it. The blast made Jeter only the 28th player to have 3,000 hits, and the first Yankee.

  Stadium security guards, who had been prepared for the event, whisked Lopez and his father to the office of the team president, Randy Levine, where officials asked his intentions, according to a team spokeswoman.

  “He goes, ‘What do you want?’” Lopez said on Monday at a Verizon store in Middletown, New York, where he works in customer service. “I was like, ‘How about a couple signed balls, some jerseys and bats.’ He said, ‘OK, I can definitely do that.’”

  Fans have not always been as generous with their windfalls. In 2006, a San Francisco man named Andrew Morbitzer, who recovered Barry Bonds’ record-breaking 715th home run ball, sold the ball on eBay for US$220,100. The ball Mark McGuire hit for his record-breaking 70th home run in 1998 sold for about US$3 million.

  Lopez, who told reporters later that he owed more than US$100,000 in student loans, said he felt the ball rightfully belonged to Jeter.

  “To have someone come up to you and say, ‘Hey, my kid is looking up to you now’ or ‘You’re a really stand-up guy, I wish there were more people like you in the world,’ it’s very meaningful stuff,” he said at the store, where he had already done nine interviews before work. “You can’t put a price on something like that.”

  In lieu of such price-setting, the Yankees gave Lopez four Champions Suite tickets for their remaining home games and any postseason games, along with three bats, three balls and two jerseys, all signed by Jeter. For Sunday’s game, the team gave him four front-row Legends seats, which sell for up to US$1,358.90 each.

  In such gratitude begins tax liability, said Paul Caron, a tax professor at the University of Cincinnati law school.

  He recalled a 2004 incident in which Oprah Winfrey gave 276 cars to the audience of her show, who were surprised to discover they incurred tax obligations of about US$7,000.

  “Pretty clearly he’s going to have to report as income the value of all the stuff he got for the ball,” Caron said.

  So break out your pencils.

  On the auction site SportsMemorabilia.com, baseballs signed by Jeter were being sold for up to US$600, jerseys for close to US$1,000 and bats for US$900.

  The tickets to the 32 remaining home games (after Sunday) have a combined face value of between US$44,800 and US$73,600, according to the team’s Web site. The tickets could be worth a lot more if the Yankees play deep into October. Steven Bandini, a tax partner at the accounting firm Zapken & Loeb, said that if the goodies were valued modestly at US$50,000, they would likely carry a tax burden of about US$14,000.

  Michael Graetz, a law professor at Columbia University who advised the IRS on how to treat the McGuire ball, questioned whether the booty was not a gift, and therefore not taxable.

  “The legal question of whether it is a gift or prize is whether the transferor is giving the property out of detached and disinterested generosity,” Graetz said. “It’s hard for me, not being a Yankee fan, to think of the Yankees as being in the business of exercising generosity to others, but there’s a reasonable case to be made that these were given out of generosity.”

  An IRS spokesman, Grant Williams, said the agency would not speculate on Lopez’s tax liabilities.

  Alice McGillion, a spokeswoman for the Yankees, declined to say whether the team would give Lopez money to meet any tax liability, saying only, “Yankee partners and partnership always comply with the tax laws.”

  Lopez said if he had to pay taxes, he hoped he could borrow from his parents rather than sell his memorabilia.

  He did, however, plan to give a bat and a jersey to his girlfriend, he said.

  “She’s the one who bought the tickets,” he said. “Jeter said I quote-unquote owe her a lot. I’m going to take his words as advice.”
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