No, you wouldn't pay taxes just on the ball. But if you sell it, that's income. The stuff he got in trade is income, though it might be hard to put a solid value on it. Of course, if he turns around and sells some of the signed items the valuation problem goes away. Not saying they'll go after him, but they may keep an eye on things. They certainly would if he just sold it at auction. Why should breaking the transaction down into multiple income-generating opportunities make it any different?