Christian Lopez, 23-year old cell phone salesman from Highland Mills, NY. decided to return Derek Jeter’s 3,000th hit ball last Saturday instead of trying to cash in.
As a thank you by the Yankees, he received memorabilia and tickets. This all looks great for the young man who gave the ball to the Yankees. However, could Lopez’s generosity now be used against him by the IRS requiring him to pay income taxes on the value of the Yankee tickets and other memorabilia that he received? “Worse comes to worse, I’ll have to pay the taxes, ” Lopez told the Daily News on Monday. “I’m not going to return the seats. I have a lot of family and friends who will help me out if need be.” “The IRS has a job to do, so I’m not going to hold it against them, but it would be cool if they helped me out a little on this.”
So what is the answer? Is it taxable? No, it is not taxable and here’s why.
What Lopez did was disinterested generosity. He gave the ball to the Yankees. He didn’t negotiate with the Yankees, make a contractor asks for any money. He simply caught the Jeter baseball and without hesitation gave it back to the team without any expectation of receiving anything in return. He just thought it was the right thing to do.
The Yankees gave Lopez the memorabilia and the tickets to commend him and thank him for his generosity in doing the right thing and giving the Yankees organization the historic ball.
I believe that what the Yankees gave Lopez is a gift. It’s not taxable under the Internal Revenue Code. If I were the attorney representing Christian, that’s what I would argue to the IRS and I believe that I would prevail.
Attorney Steve Moskowitz is featured on Sports and the Law every Thursday evening on Chronicle Live providing the legal perspective on athletes that are accused of wrong-doing, the legal issues of the NFL, NBA and MLB, backroom deals and more. Steve is also the senior partner of the Law Offices of Stephen Moskowitz, LLP. For over 30 years Steve and his Law firm, located in the San Francisco financial district, resolve tax-related issues and a wide variety of other tax matters foreign or domestic, civil and criminal.