The Saga of Derek Jeter and Taxes

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When I saw that Derek Jeter was in the news this week for changing residences from New York to Florida to lower his taxes, it made me wonder about what ever happened to Christian Lopez. Christian, a 23-year-old cellphone salesman from Highland Mills, N.Y, was the fan that caught Derek Jeter’s 3,000th hit and returned the ball to Jeter, essentially asking for nothing in return. What did he get for being a nice guy? As many sources have reported, Lopez received an additional “thank you bill” from the IRS.

Questions:
1. According to experts, the ball would have been worth between $250,000 – $500,000. Is that what the IRS is taxing him for? Could they do this? Discuss.
2. In gratitude for giving back the ball, the Yankees gave Lopez four luxury seats for every remaining home game of the 2011 season and an assortment of Jeter-signed memorabilia. Do you think this should be classified as income or a gift and is there any difference between the way these two classifications are taxed?
3. If you assume that the value of these items in (#2) was $70,000 and Christian was in the 28% tax bracket, what amount of tax would he owe if these were considered income?
4. Several companies were reported to have given Lopez gifts for returning the ball. Research what these were and if they should be counted as income.
5. Mr. Lopez was also reported to have over $100,000 in college loans at the time he caught the ball. Do you think you would have done the same thing as he did and given the ball back?

Sources:

Leland, J. (2011). Returning Jeter’s Big Hit: No Good Deed Goes Untaxed (Perhaps). The New York Times, July 11 (Retrievable online at http://www.nytimes.com/2011/07/12/nyregion/fan-may-owe-taxes-for-claiming-jeters-3000th-hit.html)
Nitti, T. (2013). Derek Jeter Flees New York, Tax Savings Soon To Follow. Forbes, March 27 (Retrievable online at http://www.forbes.com/sites/anthonynitti/2013/03/27/derek-jeter-calls-florida-home-tax-savings-soon-to-follow/)
YouTube.com (2011). Lucky fan gives ball to Jeter, asks for nothing, July 9. (Retrievable online at http://www.youtube.com/watch?v=Dbttg2yp8N4&feature=player_detailpage).