Capital Gains…From Space?

So, during a semi-regular card game, I play in, I engaged in a friendly debate with my buddies over what to me seemed like another government overreach. We began discussing the most recent sports news, that of a Texas fan catching the homerun ball Aaron Judge hit breaking his 62nd home run record. Coming to consider the high price the civilian ‘catcher’ could get for that ball, whether he sold via an auction house, a private collector, or even back to Judge, my buddies assured me that no matter what money was made, the Texas man would have to pay capital gains. The government expect their cut, as they always do, from any monies any U.S. citizen makes from any source if that ‘gain’ is over $600.00. Around another shuffle, I bemoaned the fact, that it seemed the government had no business in whatever the Texas fan made when selling Aaron’s ball since the government didn’t do a damn thing to facilitate the man catching that ball or how he might set up the selling of it later. My friends assured me the tax law does not allow for this distinction.

I could riff on how this all seems unfair to me and also on how good old FDR put tax laws into place during the war when he knew he could get away with it that are, to this day, actually unconstitutional (te entire income tax concept is unconstitutional in fact…look it up…go ahead, Ill wait). But this is a debate for another time. What has me ranting here is the even more recent news of a meteorite crashing into a Hopewell, New Jersey, home on May 8th. Luckily causing no bodily harm but some damage to the house it dropped into; talking to another buddy, I learned how much the space rock could be sold for. Private collectors, as well as scientific institutions, would pay big bucks for a rock from outer space, rare as it is to find one on Earth. But then I wondered anew, again over that capital gains conundrum, how our tax tariff might not apply in the case of a space rock sale.

U.S. Federal Income Tax laws (and again, laws I have a lot of problems with personally) are Earth-based. When you sell a house, make a profit from your little farmstand, catch a record-breaking baseball, and turn around and sell it, the source of your income comes from something created, grown, ‘from’ the Earth. A meteorite is not. Therefore, could it be argued, beyond this silly little blog, that the IRS would not be entitled to the capital gains gained from the sale of something not from this Earth, even if the person selling the not-from-this-Earth item was human and made the sale and the money from it on Earth?

Yes, a small point, I know. But when it comes to screwing the government out of what I do not believe is rightly theirs while they continue to screw us in millions of ways, I ponder what this little hot rock package from Earth really brought one N.J. homeowner at the beginning of May.

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