But doesn't it belong also to the pitcher, who intended to deliver it to his teammate, the catcher, and who hoped that Bonds would NOT have any contact with it. Why is it analyzed as if it was Bonds's only?

As I understand the property rules, the ball never belongs to any of the players, unless it goes into the stands and a fan gives it to one of them.

Why not treat the value of the physical ball as income, say $10? Then, if and when the ball is sold, tax is due on the capital gain above and beyond the original $10 value of the baseball.

How does this compare to athletes who receive awards that have aftermarket value? For example, did OJ have to pay tax when he won his Heisman or only after selling it to pay legal fees? What about a Heisman winner who gives his trophy away or an heir who inheirits it? I don't know, I'm just thinking out loud here.

Of course, all of the rules can be changed by Congress at any time, but under present law:

Receipt of a prize is income.

Income received "in kind" is measured by the fair market value of the property received, not its cost.

The ball clearly has some kind of imputed value, but as we have no asset tax on individuals the guy who caught it is home free until he sells it. I agree with Chad on how it should be treated, but expect something much more complicated.

The ball has a clear and ascertainable fair market value the moment it's caught. That is the value that would be subject to tax if the tax indeed applied.

as we have no asset tax on individuals the guy who caught it is home free until he sells it

Even without an asset tax, increases to wealth are taxable as income. Which is why prizes are income.

But does the ball have a "clear and ascertainable fair market value?" The value cannot be determined, let alone realized, until it is sold. It makes more sense to me for the government to wait until it is sold so that real (as in reality) income has been realized.

And as far as the gift tax goes, the team or MLB as an organization would be liable for "giving" the ball to the lucky person. Does the gift tax apply to corporations?

The value cannot be determined... until it is sold.

I disagree. There are many sports memorabilia dealers who could easily appraise that ball even before it goes over the fence.

Does the gift tax apply to corporations?

No.

Jack wrote:
"When rich folk die and leave big wealth to their families, the tax is known as the estate tax."

Jack, Jack, Jack...
You've failed to learn the Republican-speak of current years. The Repubs use the term "death tax" rather than "estate tax."

So much for their theory of Inculturation-by-Osmosis!

Throw it back. It's bogus.

The Repubs use the term "death tax" rather than "estate tax."

And it's quite effective. Too bad we folks on the left are not quite so clever, or nasty.

Reading between the lines, are you saying that the best thing to do if I catch such a ball is to give it to my kids to sell?

For reasons not germane to this post, I don't think giving it to your kids to sell will save much tax, at least if they're under the age of 18. And if they're over 18 and you really give them the ball, you may never see the money!

The corollary to the following is what?

"It is enough to justify the deduction here that the transaction causing the loss was completed when the seizure was made." (274 U.S. 398)

Seems like a simple case of Recognition vs Realization of income. I suggest the person who has the home run ball keep his ticket stub to establish basis. I'd also keep my receipts for hot dogs, cotton candy, the $10 cups of Budweiser, parking, hotel rooms (if any - I've stayed at that hotel with the skybridge to the ballpark, not when the Padres were in town) connected to the game, the price of food purchased before/after the game in the Gas Lamp District and all the other costs associated with attending the game.

The realization vs recognition matter is a no brainer. Your CPA can make that case. If you're going to pay a tax attorney, you should go for every dime you can get, or what are they good for anyway? It's sort of like paying your physician to tell you what your RN knows better.

Whatever income is realized in this situation would automatically be recognized. The question is whether there has been realization, or just imputed income.