Taxes and Milestone Home Run Balls: Fan Returns Derek Jeter’s 3,000th Hit

For his historic 3,000th hit, Derek Jeter homered into the left-field seats at Yankee Stadium. One lucky fan, Christian Lopez, was able to snag the home run ball when it rolled in front of him. As he attempted to secure the valuable souvenir, surely Lopez was not thinking about the tax controversies that have surrounded milestone home run balls.

In 2007, as Barry Bonds narrowed in on Hank Aaron’s career home run record, Tom Herman wrote an article in the Wall Street Journal looking at the potential tax consequences of catching the record-breaking ball. The article recounts a controversy that ensued in 1998 as Mark McGwire approached Roger Maris’s single-season home run record. When an IRS spokesperson was asked about the consequences of a fan returning the milestone ball to McGwire, the spokesperson responded that the fan could get hit with a significant gift tax.

As it turns out, this statement was not well received by the public or Congress. Indeed, it did not take long for then-IRS commissioner Charles Rossotti to issue a statement confirming that a fan would not, in fact, be taxed upon returning the caught ball to McGwire. Mr. Rossotti commented: “All I know is that the fan who gives back the home-run ball deserves a round of applause, not a big tax bill.”

As for Lopez, he surprisingly chose to hand over the potentially priceless ball to Jeter without requesting anything in return. Nevertheless, he did not walk away empty-handed. The Yankees gave him four luxury box tickets for all remaining 2011 games in addition to a Jeter-signed ball and other team merchandise.