Oscar Guests Received $100,000 Gift-Bags

[xli_ne]

From http://www.imdb.com

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."

Its all fine that they have to pay taxes on these gifts, but $100,000?? God damn, and a $7,000 dollar underwear set?? Just boggles the mind.

[Sdashiki]

Glad to see the IRS taxing the rich like that.

Do you think Rod Stewart paid his taxes?

Just dont let me see an article where the attendees bitched about paying.

[edesignuk]

I just love the fact that people who can afford to pay for stuff, never actually have to.

It's the same with big execs of companies, they get massive pay packets and bonuses, then the company pays for everything anyway.

Great

[i.Feature]

I heard on the radio this morning that this has become a bit of a problem because quite a few of the recipients make less than $50,000 a year. Can you imagine the hit you take when your income jumps a third and all you have to show for it is some nice underwear.

[StarbucksSam]

Originally Posted by Sdashiki

Glad to see the IRS taxing the rich like that.

Do you think Rod Stewart paid his taxes?

Just dont let me see an article where the attendees bitched about paying.

Taxing the rich, blah blah blah. I'm a Democrat, but even I think that people who have more having to pay higher percentages is inequitable and wrong.

[macartistkel]

Its all fine that they have to pay taxes on these gifts, but $100,000?? God damn, and a $7,000 dollar underwear set?? Just boggles the mind.

They are just lucky--you can't bitch about it! You know you would take it if it was offered to you and plus I have seen some celebs commenting on how they feel bad about accepting the gifts---its not their fault though and its a great way for companies to advertise their products.

[dornoforpyros]

Taxing $100,000 worth of gifts? Sounds fair to me, if your only making $50,000 a year and this represents a huge hike in income don't accept the bag. It's quite simple, or donate it to a womans shelter or something an accept it as a charity write off.

[raggedjimmi]

haha, guess where all that money you put into the cinema just went glad I don't care much for cinema.

[Lord Blackadder]

Accept the bag, then ebay it with a reserve of $130k.

[Doctor Q]

This is exactly why I turned down the offer to be a presenter this year. Also, they forgot to ask me. Or invite me.

And now, a tax question. If they got cash in their goodie bags, would that be taxed as well?

If so... Suppose somebody wants to give you something valuable, but wants to pay the taxes you'll owe for you. Is there a way they can do that?

Let's say they give you a rare Apple mousepad worth $100,000 and you'll owe $30,000 in tax on it (30% marginal tax bracket). If they give you $30,000 in cash to go with the mousepad, do you owe $9000 in tax (30%) on the $30,000 gift? If they give you $9000 for that tax too, do you owe another $2700 tax on the $900? If they give you the $2700, do you owe $810 tax on the $2700, and on so on?

So can they give you $30,000+9000+2700+810+243+73+22+7+2+1=$42,858 in cash (rounding to dollars at each step) to cover all these taxes? You'd use $12,858 of the $42,858 to pay the tax on the $42,858, and the remaining $30,000 of the $42,858 to pay the tax on your mousepad.

[zelmo]

Doctor Q, you have waaaaay too much time on your hands.

[TheMonarch]

I don't get it. How the hell can underwear be worth that much? Its probably a couple of dollars worth to make...

Let me get this straight:

If I had a popsicle stick, added a few bells and whistles [Glitter] then slapped a $100,000 price tag [I'd only sell 5 "Limited edition"] and then gave it to someone here on these boards; then they'd have to pay taxes on it?

[jaydub]

damn I would have loved a coupon for lasik surgery, mine was $$$$$$$$.

[Doctor Q]

Originally Posted by zelmo

Doctor Q, you have waaaaay too much time on your hands.

No, I'm just naturally curious. And if people weren't curious, we never would have discovered that the Earth is flat!

Originally Posted by blaskillet4

I don't get it. How the hell can underwear be worth that much? Its probably a couple of dollars worth to make...

Things are worth whatever people will pay. In Hollywood, paying luxury prices for things that aren't worth it on paper is a way of showing off and competing, so it is worth it to some people. If they charged less for some of these items, some of the wealthy would no longer buy them!

If I had a popsicle stick, added a few bells and whistles [Glitter] then slapped a $100,000 price tag [I'd only sell 5 "Limited edition"] and then gave it to someone here on these boards; then they'd have to pay taxes on it?

If nobody pays you that much for one, you have no evidence that that's its value. I'm pretty sure that it's the "fair market value", not the price you ask for your fabulous popsicle stick, that would be taxed. If the recipient can show that it sells for or is worth only $1 on the open market, they only owe tax on $1. And only if they accept your gift.

[floriflee]

Originally Posted by i.Feature

I heard on the radio this morning that this has become a bit of a problem because quite a few of the recipients make less than $50,000 a year. Can you imagine the hit you take when your income jumps a third and all you have to show for it is some nice underwear.

Yeah, but do they have to accept the goodie bag if they don't want to take on the tax costs? It seems like it wouldn't be something the Academy would force on you. Take at your own risk.

[hookahco]

Originally Posted by Doctor Q

This is exactly why I turned down the offer to be a presenter this year. Also, they forgot to ask me. Or invite me.

And now, a tax question. If they got cash in their goodie bags, would that be taxed as well?

If so... Suppose somebody wants to give you something valuable, but wants to pay the taxes you'll owe for you. Is there a way they can do that?

Let's say they give you a rare Apple mousepad worth $100,000 and you'll owe $30,000 in tax on it (30% marginal tax bracket). If they give you $30,000 in cash to go with the mousepad, do you owe $9000 in tax (30%) on the $30,000 gift? If they give you $9000 for that tax too, do you owe another $2700 tax on the $900? If they give you the $2700, do you owe $810 tax on the $2700, and on so on?

So can they give you $30,000+9000+2700+810+243+73+22+7+2+1=$42,858 in cash (rounding to dollars at each step) to cover all these taxes? You'd use $12,858 of the $42,858 to pay the tax on the $42,858, and the remaining $30,000 of the $42,858 to pay the tax on your mousepad.

anything you aquire, whether it be in the form of cash or goods, is taxable and all adds up to your total yearly income.

[hookahco]

Originally Posted by Doctor Q

No, I'm just naturally curious. And if people weren't curious, we never would have discovered that the Earth is flat!

Things are worth whatever people will pay. In Hollywood, paying luxury prices for things that aren't worth it on paper is a way of showing off and competing, so it is worth it to some people. If they charged less for some of these items, some of the wealthy would no longer buy them!

If nobody pays you that much for one, you have no evidence that that's its value. I'm pretty sure that it's the "fair market value", not the price you ask for your fabulous popsicle stick, that would be taxed. If the recipient can show that it sells for or is worth only $1 on the open market, they only owe tax on $1. And only if they accept your gift.

its too bad that the fair market value of those bags are less than half of their reported value. For example...
One of the celebrities gets a ring shaped like a star which some hotshot celebrity jeweler said goes for about $80,000.00
It was 8 karat and ALL tiny pave diamonds. Its worth about $4,000. sorry people.

[quigleybc]

If people keep pirating movies, then next year the bag might only be worth $50,000....now that would be a crime...

[Doctor Q]

Originally Posted by hookahco

anything you aquire, whether it be in the form of cash or goods, is taxable and all adds up to your total yearly income.

If the Academy adopted the presenters and gave them these gifts as parents to children, different tax rules would apply. Talk about having spoiled children!

[KingSleaze]

Last year, I won a car. GM 'Hot Button' promotion. Hey, great, I got a new car.
I had to pay state sales tax to be able to pick it up. $4000.
I got a tax statement from GM. The car is valued at $21,644 worth of income to me (and that much of a write-off for them).
I've got to pay roughly additional $8000 to federal and state income tax, because no money was withheld in the claiming of the prize.

That car made up about 1/3 of my income for last year. Pity, I can't claim it's a gift and that GM actually made more money off of giving me the car as part of the contest promotion.

Sucks to win a car. (BTW, actual retail price is higher than what GM is dunning me for, fair market value, blah, blah, blah)

So, sure. Tax those 'gift' bags.

[clayj]

Absolutely the value of those gift bags should be taxed as personal income... especially since you KNOW the companies that donated the products to the bags are deducting the value of the donations from their taxable income as a business expense.

The stupidity of the situation is increased by the fact that none of those celebrities are going to publicly endorse the companies that donated to the bags... we're not gonna see Sandra Bullock extolling the virtues of Victoria's Secret anywhere. And I bet half of that stuff (if not more) ends up in the hands of their agents, business managers, family, or friends.

[Clydefrog]

disgusting

[cycocelica]

Sounds fair to me.

[ShaunPriest]

How on earth do they need to pay tax? These are gifts!

[clayj]

Originally Posted by FearFactor47

How on earth do they need to pay tax? These are gifts!

Corporations can't give "gifts". Only individuals can give gifts (in the traditional sense of the word), and if the gift is monetary in nature, there is a non-taxed limit of $11,000 per annum from Person A (the gifter) to Person B (the giftee). Anything beyond that is taxable as normal income. (Of course, this is a rough explanation of the process.)