Ueberroth’s Ruling Brings Up Tax Question

Being a CPA, I read with interest The Times’ article concerning the “charitable contributions” under Peter Ueberroth’s plan.

I believe that a major tax issue/principle was overlooked in the preparation of your article. When the charitable contribution is made by the player, two objectives are achieved. First, there is a charitable contribution, and, second, there is the right to play baseball instead of sitting out a suspension. This second objective is a valuable right which is not earned without the transfer of money to the charity and therefore diminishes the amount of the “charitable contribution.”

An analogy may be drawn to a $250-a-plate charity dinner. The amount allowable as a charitable deduction is necessarily something less than $250 because the donor has achieved two objectives from the transfer. First, there is a charitable contribution and, second, there is the right to attend the function and eat the dinner. Whether or not the donor attends the function, under extensive tax law precedent, the amount allowable as a charitable contribution must be less than $250.

In the baseball example, the valuation of the right to play baseball as opposed to sit out suspensions of various lengths is, of course, difficult. But it must be valued and the amount of the “charitable contribution” diminished by that valuation. In the case of a Dave Parker or a Keith Hernandez, the right to keep your name before the public eye by playing ball, having a great season and negotiating a big contract could easily by valued in the tens of thousands of dollars.

I am amazed that not one commentator has raised the questions which I raise and yet the tax issue seems so fundamental. Am I completely off base (pun intended)?

DAVID HASKELL

Santa Monica