Oscar Guests May Be Hit with Taxes

IMDB.com ^ | 3/6/06

[paudio]

Guests who took home gift-packed bags from Sunday's 78th Annual Academy Awards ceremony may have to pay $30,000 in taxes on their new acquisitions. The bags, which included a $7,000 Victoria's Secret underwear set and a coupon for Lasik surgery, are worth approximately $100,000 each. And unfortunately for the celebrities present, the Unites States Inland Revenue Service has declared that the bags given to Oscar attendees count as taxable income. IRS commissioner Mark Everson quips, "We want to make sure the stars 'walk the line' when it comes to these goody bags."

[wafflehouse]

good point..

[em2vn]

Days old repeat.

[kingu]

IRS Website FAQ on gifts...

Q: What is the gift tax?

The gift tax is a tax on the transfer of property by one individual to another while receiving nothing, or less than full value, in return. The tax applies whether the donor intends the transfer to be a gift or not. The gift tax applies to the transfer by gift of any property. You make a gift if you give property (including money), or the use of or income from property, without expecting to receive something of at least equal value in return. If you sell something at less than its full value or if you make an interest-free or reduced-interest loan, you may be making a gift.

Q: Who pays the gift tax?

The donor is generally responsible for paying the gift tax. Under special arrangements the donee may agree to pay the tax instead. Please visit with your tax professional if you are considering this type of arrangement.

Seems pretty clear cut there; the donor pays the tax on the item, not the one receiving the item. The only thing that would make sense to me is if the IRS is determining that these aren't gifts, but instead, are prizes. It'd make an interesting court case.

[Robert A Cook PE]

Those were the presenters, right?

So, this is the "payment" to ensure those very, very prominent people would show up and make their presentations and say their lines in public while handing out the envelopes and prizes.

Seems very clear to me that if 2 dozen people make speeches on TV, and those same 2 dozen people get very very expensive 100,000.00 "gifts" in return for making for making short presentations on TV to a national audience, then those gifts are actually income.

[fooman]

you are right about gifts. I still think it was an appearance fee. I hope they are taxed.

[SusaninOhio]

Any time my husband 'won' a 'free' anything (trip, tv or other toy) in a sales contest, we pay taxes on the value of the 'freebie'. ALways have.

That's why often folks who win cars, or the HGTV home contest, often sell the prize because they cannot afford the taxes.

I understand that the last couple winners of that home (I think it was HGTV contest, not positive) sold the home because they could not afford the taxes and probably not the upkeep either -

I think it is grand that they are finally getting the recipients of the oscar freebies. After all, if you hit a jackpot in Vegas, the IRS is right there to collect its share of the prize.

[CFC__VRWC]

babs streisand is also famous for demanding such pay off the books.

Does she also demand you supply the RV she has follow her everywhere she goes, so she has a place to use the restroom?

[gimme1ibertee]

My, my, they had to pay the guests a lot to make them come.

There's a joke in there someplace....:D

[Political Junkie Too]

Does it's value increase when it's owned? :P

I don't know... how much do you think someone would pay on Ebay for a pair of panties worn by Angelina Jolie?

Remember the old Chevy Chase joke about a new stamp commemorating prostitutes? It costs a dime, but if you lick it it's a quarter. The panties are $7,000, but if you wear it...

-PJ

[dfwgator]

Some liberals are about to get "mugged."

[Lurking Libertarian]

Absolute bunk. That's not income, that's a gift.

There is a lot of case law about "gifts" under the Internal Revenue Code. If you give a gift to a friend or family member out of "disinterested generosity," it's not income to the recipient; but if you give someone something out of a business motivation, it is legally considered income to the recipient even if it's a "gift" in the sense that you had no legal obligation to give it to them.

[dware]

FYI

[kingu]

but if you give someone something out of a business motivation, it is legally considered income to the recipient even if it's a "gift" in the sense that you had no legal obligation to give it to them.

So the telephone book that just got dropped off on my doorstep is now income? The junk mail in my box? I got some calendars in the mail as well; those must be income as well.

I'm not jumping down your throat, it just seems absolutely idiotic on the part of the IRS. If they don't want to let companies write off these things as 'advertising' - then fine, don't let them. Crud like this will get me to support the NRST.

[Lurking Libertarian]

So the telephone book that just got dropped off on my doorstep is now income? The junk mail in my box? I got some calendars in the mail as well; those must be income as well.

In theory, yes, but the fair market value of those things is so miniscule that the IRS ignores them. But win a car on a TV game show, and they will come knocking.

I'm not jumping down your throat, it just seems absolutely idiotic on the part of the IRS. If they don't want to let companies write off these things as 'advertising' - then fine, don't let them. Crud like this will get me to support the NRST.

The idiocy is not on the part of the IRS but of Congress. Congress writes the tax laws; the IRS just enforces them.

Actually, the principle is not entirely idiotic, once you accept the idea of an income tax; otherwise, everyone would "volunteer" to work at their office and their boss would give them "gifts" for coming in.

[Xenalyte]

Inland Revenue Service?

[Sun Descending]

Fair enough!

[Sun Descending]

Got it. Thanks. I was always bad at story problems :P.

[Sun Descending]

Got it. Thanks. I was always bad at story problems :P.

[Sun Descending]

Interesting. Thanks :)

[HiTech RedNeck]

But the stars can donate what they don't want to a charity, taking it back off their tax return. Useless items (like a coupon for Lasix for someone who has normal vision already and nontransferrable) should count for being worth $0.