Matt Murphy and his Bonds #756

Matt Murphy is the courageous fan who survived being squashed by a pile-up of about 30 people and emerged with the ball that Barry Bonds hit to break Hank Aaron's record for career home runs. Quite a souvenir from a baseball game!

Probably a six-figures kind of souvenir. One that may be taxable income even if Murphy decided not to sell it. From the Boston Globe:

Selling the ball for that amount would instantly put Murphy in the highest tax bracket for individual income, where he would face a tax rate of about 35 percent.

Even if he does not sell the ball, Murphy would owe the taxes based on a reasonable estimate of its value, according to John Barrie, a tax lawyer with Bryan Cave LLP in New York. Capital gains taxes also could be levied in the future as the ball gains value, he said.

Let's assume that this is indeed the case and Mr. Murphy will have an additional $500,000 or so in taxable income come April, 2008, whether he sells his Bonds #756 or not. (I don't know.) Unless he has six figures in cash lying around to pay the tax bill, he'll need to come up with it. The easiest– and probably the smartest — way would be to sell the ball before December 31st, 2007. There are several very compelling reasons for doing this:

• Even though income this large is heavily taxed, Uncle Sam doesn't get it all. If his taxable income is exactly $500,000 for 2007, then he'll owe just over $154,000 in federal income taxes. After state taxes and other stuff kicks in, he'll still have well into six figures left.
• The value of this ball in the future is uncertain. Almost the entire value of this ball is the value that collectors place on it. You can get a baseball for under $5. The market forces that push the value of this particular baseball to six figures depend on the availability of people with extremely deep pockets who will bid against each other at auction. Who's to know whether this money will walk away after a recession hits, or after there's a lot of bad press following this record? I wouldn't hazard a guess. But putting the ball up at auction right now will almost certainly bring at least six figures, based on recent selling prices of similar balls. (I sold my Washington $1 coin blank planchet error without giving it a second thought.)
• If he keeps it, he has to protect it. Well, he doesn't have to, but it would be pretty stupid to just throw it in a closet where it can get banked up or stolen. (It would be worthless to the person who stole it, though: “Hey, where'd you get that?”)
• Pay off those debts and get a great start on a financial future! Grabbing the Bonds #756 is what's known in common parlance as “hitting the jackpot.” $300,000 or even $100,000 compounded for 40 years? How set would this guy be if he sold the ball and treated the money like he never had it? Easily eight figures when he retires if he still works. Few people get this opportunity.
• If Mr. Murphy had nothing but the memories of being the first to own that ball after it left Bonds' bat, would that be any less significant to him than having the ball up on his mantel? Heck, take a few pictures. A few hundred. Grab videos. Put them up on YouTube so he can see the ball whenever he wants, just about wherever he wants. That'd be just as good for me, really — plus I'd have a boatload of cash.

But about the worst thing he could do is to let other people “help” him “protect” his “asset.” They'll bleed him dry.

Sell the ball, pay the auctioneer's commission, pay the taxes, and be wise with the money, Mr. Murphy! 😉

Or let the eBay Community have at it.