Yankees Fan Who Caught Derek Jeter’s 3000th Hit May Owe IRS Taxes

July 13, 2011 | By: TaxCure Staff

yankees fan who caught 3000th hit by derek jeterChristian Lopez, a 23-year-old from Highland Mills, NY, caught Derek Jeter’s 3,000th hit home run ball. Instead of selling the ball – as many others in similar situations have done in the past – or holding on to the ball as a keepsake, Lopez chose a much more generous route: he gave the ball back, no strings attached. His selflessness will now be rewarded with the warm feeling of giving, several luxury box tickets and some autographed Yankees memorabilia – and a tax bill exceeding $10K.

Experts have estimated the home run ball that Lopez caught on Saturday at Yankee Stadium to be worth approximately $250,000 to $300,000 at auction. The ball symbolizes Jeter’s historic achievement; with that home run, he became the 28th person in baseball history to reach 3,000 career hits – the first Yankee player to do so – and only the second player to accomplish it with a home run.

As a show of gratitude to Lopez for returning the precious relic, the Yankees provided him with several tokens of appreciation, including:

  • 2 front-row seats for Sunday’s game (which reportedly sell for up to $1,358.90 each)
  • 4 luxury suite tickets for every remaining home game and postseason
  • Signed memorabilia (including 3 bats, 3 balls, and 2 jerseys)

Preliminary estimates value all of these items combined to be worth somewhere between $32,000 and $50,000, depending on a variety of circumstances, such as whether or not the Yankees make it to the playoffs and, if so, how far they go in the post-season.

For Christian Lopez, a Verizon customer sales rep, a $32K-$50K valuation on his “prize” means a tax liability in the neighborhood of $14,000.

Although the IRS has declined to comment on the situation, many accountants expect the IRS to view the goods that Lopez received from the team as a “prize,” or taxable income, in the same way, that game show contestants are taxed on all of their winnings.

However, Lopez could argue that the tickets and memorabilia were gifts, and therefore not taxable, by proving to the IRS that the “gift” was given out of unbiased and impartial generosity and not due to charitable, educational, literary, or civic achievement, that he did not perform any service for this award or apply for it, and that the prize would be going to a government entity or charitable organization.

If Lopez is unable to prove that the items he received were a gift, they will be classified as income and he will receive a 1099 with the claimed value of the award at tax time. Under these circumstances. he will have the option of requesting Form 4598 from the IRS and explaining to them why he feels that the prize is overvalued. If the Yankees don’t respond or if the IRS agrees with the claim, Lopez may be able to drastically reduce his tax liability.

Lopez – who says that he owes more than $100,000 in student loans – can avoid the issue altogether by declining the reward, but the loyal Yankee fan has no plans to surrender his seats, preferring instead to ask his friends and family for help if he’s hit with a hefty tax bill.

To help Lopez out, the Yankees could pay the taxes on his behalf. Unfortunately, the Yankees are not exactly known for their generosity, making it a far less likely option.