Academy Award Losers Win Big … But Uncle Sam Wins Even Bigger

Wednesday, February 25, 2015

By Jeffrey Levine, IRA Technical Expert
Follow Me on Twitter: @IRAGuru4EdSlott

It paid to be a loser at this year’s Academy Awards, at least for some. Instead of taking home the golden Oscar, losing nominees in the big categories – best supporting actor, best supporting actress, best actor, best actress and best director – took home some serious swag.  Neil Patrick Harris, the show’s host, also reportedly received the same package of goodies. So, just how much swag is “serious swag?” Try an estimated $168,000 worth of vacations, beauty products, custom candy and even some adult-only products. All free.

Well, sort of free. You might think that all these goodies would count as lavish gifts, bestowed upon some of our most talented artists out of the goodness of the donating company’s heart. If that were the case, these goodies would, in fact, really be free. But let’s face it, the companies providing these items aren’t doing it purely out of respect or for altruistic purposes. They’re doing it for marketing purposes and for financial gain over the long-term. Thus, the gift bag is not so much a “gift,” but rather, a collection of items taxable to the receiving celebrity at fair market value. Thus, receiving celebs could be looking at paying tax on an additional $168,000.

Considering many of today’s Hollywood elite call California –a state that has the highest state income tax in the nation – their home, it’s possible that this “free” bag of goodies could end up costing them over $80,000 in combined federal and state income tax. You might think to yourself, who’s really going to follow-up on this? Aren’t they just going to conveniently “forget” to report that income when it comes time to file their tax returns? Not likely. Believe it or not, the company putting together the swag bag will actually be issuing 1099 forms to the receiving celebrities, ensuring that Uncle Sam is made fully aware of their gift … I mean income.

So next time you’re at home, thinking to yourself how wonderful it must be to be receiving all these “free” goodies, don’t forget the age-old adage…

…nothing in life is truly free.

 

Receive Ed Slott and Company Articles Straight to Your Inbox!
Enter your email address:

Delivered by FeedBurner

 

Post Views: 9
Posted in: , ,

Content Citation Guidelines

Below is the required verbiage that must be added to any re-branded piece from Ed Slott and Company, LLC or IRA Help, LLC. The verbiage must be used any time you take text from a piece and put it onto your own letterhead, within your newsletter, on your website, etc. Verbiage varies based on where you’re taking the content from.

Please be advised that prior to distributing re-branded content, you must send a proof to [email protected] for approval.

For white papers/other outflow pieces:

Copyright © [year of publication], [Ed Slott and Company, LLC or IRA Help, LLC – depending on what it says on the original piece] Reprinted with permission [Ed Slott and Company, LLC or IRA Help, LLC – depending on what it says on the original piece] takes no responsibility for the current accuracy of this information.

For charts:

Copyright © [year of publication], Ed Slott and Company, LLC Reprinted with permission Ed Slott and Company, LLC takes no responsibility for the current accuracy of this information.

For Slott Report articles:

Copyright © [year of article], Ed Slott and Company, LLC Reprinted from The Slott Report, [insert date of article], with permission. [Insert article URL] Ed Slott and Company, LLC takes no responsibility for the current accuracy of this article.

Please contact Matt Smith at [email protected] or (516) 536-8282 with any questions.