Christian Lopez is the 23-year-old kid with $100k in student loans who works at a cell phone kiosk at the mall and was fortunate enough to catch Derek Jeter’s 3,000th hit (a home run). If you were around this weekend, you probably took place in this spirited debate about whether or not Lopez should have asked for more than some tickets and memorabilia (autographed balls, bats, etc) from Jeter. I’m guessing Lopez never read the Sun Tzu’s the Art of War, because he did zero negotiating even though he entered what could have been a war with the Yankees in a position of power.
Well, you knew this was coming … the tickets and memorabilia Lopez received? They’re probably taxable. John Leland of the NY Times talked to some tax/law types, and I wouldn’t be surprised if Lopez vomited last night or this morning when he read this:
The tickets to the 32 remaining home games (after Sunday) have a combined face value of $44,800 to $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 items were valued modestly at $50,000, they would probably carry a tax burden of about $14,000.
I threw up a little bit in my mouth after reading that. Of course, as tax professionals point out to the Times, Lopez could argue that the tickets and memorabilia were gifts, and therefore not taxable. The IRS may counter that what Lopez received was a “prize” and thus taxable. Maybe the IRS agent he’s dealing with is a Yankees fan. Or a Red Sox fan.
Best way out of this mess? The Yankees deliver $50k in cash to Lopez on the sly (he doesn’t deposit it all at once because I believe 5-figure cash deposits are immediately flagged by banks), and tell him to not talk to the media anymore and this story goes away. If there is a moral to this story – cold, hard, cash.
Returning Jeter’s Big Hit: No Good Deed Goes Untaxed (Perhaps) [NYT]