One can always focus on lending activity hitting a 25-year low, or the once mighty loanDepot reducing its own liquidity or handing raises out to executives, or Better.com’s CEO back in the headlines. So let’s veer off the mortgage track for a bit. Not everyone in residential lending is a baseball fan, but everyone in our biz knows a thing or two about money. Aaron Judge of the New York Yankees hit his 62nd home run of the season, a new record. The ball was caught by a fan, and the question has been raised that has not been answered: “What happens when you take possession of a baseball that is worth $1 million to $2 million? The closest that the IRS has come to answering this is a memo sent in the late 1990s titled the “treasure trove regulation.” When one finds a buried treasure, or in this case catches a million-dollar baseball, it would technically lead to a $332,955 tax bill. If the fan gave the ball back to the player, it could technically trigger a gift tax. Alternatively, the IRS would not actually want to collect any tax on the ball until it’s sold, when it’d be taxed as a capital gain, or as a collectible, which has a 28 percent long-term rate. Some suggest the IRS should tax the fan on the $25 retail price of the baseball, and then treat the million-dollar price as an unrealized gain not to be taxed until it’s sold. (Today’s podcast is available here and this week’s is sponsored by Candor Technology, Home of the One Touch Underwrite, supporting lenders from Point of Sale to Post Close QC, to reduce repurchase risk, increase underwriter productivity by 400% and decrease turn-times by 10 days.)
Source: Mortgage News Daily