Baseball: Revisiting Games Behind in the Loss Column

Last year I wrote a post about the concept of “games behind in the loss column” in baseball standings. This is a term that gets used a ID-100271413lot as we head into the final stretch of the baseball season.

I wanted to revisit this topic with a real example from the current season.

Let’s go back to the the American League Central Division standings on the morning of June 11th:

Detroit 33 28 0
Kansas City 33 32 2
Chicago 33 33 2.5
Cleveland 33 33 2.5


Here we see the classic example of where games behind in the loss column is relevant. You have a jumble of teams that have played an unequal number of games. KC has played 65 games, Chicago and Cleveland have played 66 games, but Detroit has only played 61 games.

But this race is not really as close as it seems. Detroit is only 2 games up on KC, but they are 4 games up in the loss column.

Let’s pretend the season is only 70 games long. So Detroit has 9 games left, KC 5 and Chicago and Cleveland 4.

KC, Chicago and Cleveland are basically helpless in this scenario. Even if they win all of their remaining games, they have to rely on Detroit losing.

So let’s say KC wins their last 5 games to finish 38-32. They are still in a bad situation because they must rely on Detroit losing at least 4 of its last 9 games. That’s possible, of course, but the point is: in our hypothetical scenario, KC doesn’t “control its own destiny.” It has to rely on Detroit losing.

Winning, in and of itself, doesn’t close that 2-game gap in the standings because the gap is in the loss column.

Now let’s say the gap was in the win column:

Detroit 33 28 0
Kansas City 29 28 2


If the season ends at 70 games and KC wins all of its remaining games, they are guaranteed to at least finish in a tie with Detroit. Obviously winning 11 straight is a tall task, but this illustrates that KC can close the gap with Detroit just by winning. Something that doesn’t happen when the deficit is in the loss column.

Image courtesy of Stuart Miles /

Find All of My Identity Theft Blog Posts in One Location

One year ago Saturday, Wendy Boka’s identity theft saga with the IRS finally ended when she received her long-awaited refund check from the IRS, took it to the bank and it went through without issue.

My ongoing blog posts (19 parts) about Wendy’s story, and the IRS’s ham-fisted way of handing her case, has been the most-talked-about thing on my blog for nearly 2 years (Part 1 debuted on August 6, 2012).

Now, I have brought together all 19 parts in one convenient location on this blog — click here! — so that any reader can quickly and conveniently access any piece of Wendy’s story at any time.

Lo, The Plight of the Unknown EA

The local business directory for my town was just published.

I’m an Enrolled Agent. Commonly abbreviated as “EA.” But apparently the publishers of the directory were confused:

Apparently I’m actually an extended-play record.

I haven’t called the local group that published the directory yet. It was a free listing, and it made me laugh, so I’m not angry.

It was probably just a typo or just an honest mistake.

But would a mistake like this be made with a CPA?

I doubt it.

Then again, CPAs have major name recognition.

Meanwhile, 90% of the population has never heard of an EA.

Taxation of Credit Card Benefits

A few weeks ago I got a booklet in the mail from my credit card company. The booklet was sent as a reminder that I have a “credit defense” benefit on my credit card.

I pay a premium $0.39 per $100 of ending balance in my account. For that payment, I get to use a variety of benefits provided by the credit card company.

For example, if my wife or I were to get laid off or become disabled, the credit card company would make our minimum monthly payment each month for a certain period of time. Other benefits include reimbursements for medical expenses, car repair, taking the pets to the vet, and moving expenses.

I’ve never actually used any of these benefits, but I don’t mind paying the premium because I’m paranoid about sudden loss of jobs or becoming disabled.

At any rate, what are the tax consequences of these types of benefits?

I did quite a bit of research for this post, but turned up little when it comes to reimbursement of auto expenses, pet expenses and moving expenses. There is, however, guidance on the unemployment benefit part.

Let’s break this into two pieces.

One: Unemployment or Disability Payments

If you become unemployed or disabled and the credit card company makes your monthly payments for you, those payments are taxable if the payments exceed the amount of premiums you paid during the year.

This part is clear (see page 94 of IRS Publication 17).

Two: Reimbursements

What’s less clear is what happens if the credit card company reimburses you for things such as car repairs.

For example, under my credit card’s benefit program, they will pay up to $250 of car repairs once a year. The way it works is, I pay for the car repair using the credit card, and then the credit card company will issue me a credit on my account for up to $250. Same concept for medical expenses, pet expenses, etc.

I couldn’t find anything definitive about this, but I think this type of benefit is not taxable. Unlike with the unemployment/disability payments, these benefits are a reimbursement for expenses actually incurred.

The credit to the account does reduce the amount of credit card debt owed, but unlike in typical debt cancellation, this is not really an acquisition of wealth because it’s a reimbursement of an expense.

The only tax implication I can think of is if you’re reimbursed for a deductible expense. In that case, you would reduce your deduction by the amount paid by the credit card company.

Deducting Losses in Retirement Accounts

The general tax rule is that market losses in retirement accounts are never deductible. That statement is true, but as with everything relating to the taxes, there’s a “but.”

In rare circumstances, you might be able to deduct losses from these accounts.

Basic Requirements for All Types of Accounts

  1. All accounts of the same type must be fully paid out. For example, if you have 3 IRAs, all 3 accounts must be fully paid out.
  2. You must have after-tax basis. This means amounts put into the account with after-tax dollars. With Roth IRAs, your basis is whatever you have paid into the account. In traditional IRAs and 401(k) plans, your basis would be any non-deductible contributions you have made. Most 401(k) plans will never have non-deductible contributions in them.

The Mechanics of Figuring the Deduction
Assuming you meet the above two requirements, you then have to calculate your loss. To do this, you take the amount of cash you receive and compare it to your basis. If the cash received is less than your basis, you are eligible for a deduction.

Example: You close out a Roth IRA account. It is the only Roth IRA you have. Through the years, you paid in $5,000 into the account. You received $4,000 when you closed out the account. The amount of loss eligible for a deduction is $1,000 ($4,000 received minus $5,000 basis).

Hurdles to Clear
In the example above, you are still not in the clear for taking a $1,000 deduction. Tax law puts three hurdles in place that make it hard to actually take the deduction.

  • Hurdle #1: losses on retirement accounts are not considered capital losses. Instead, they are considered miscellaneous itemized deductions. This means: you only get the deduction if you itemize deductions.
  • Hurdle #2: because it’s a miscellaneous itemized deduction, the amount of the loss has to exceed 2% of your income in order to be deductible.
  • Hurdle #3: Only the portion of the loss that exceeds 2% of your income can be taken as a deduction.

Example: continuing with the above example of a $1,000 loss – if your income is $40,000, you take $40,000 x 2%, which equals $800. You subtract $800 from the $1,000 loss, which equals $200. You can put $200 as an miscellaneous itemized deduction on your tax return.