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Thank you Academy Awards for Your Generous “Gift.”

by Melissa Rager

Oscar buzz has been hitting the media for the past few weeks with the annual predictions of who would win which category and who would wear what.  I’m not sure if anyone predicted Helen Hunt would wear a gown from the well-known clothing store, H&M, nor that she’d top it off with $700,000 in jewels; although that was nothing compared to Jennifer Garner donning Neil Lane jewels worth $2.5 million.  Now that the award show is over, the winners have been announced (some even fell faster than their rise to fame… Jennifer Lawrence) and photos of the best dressed have been revealed, what could be left to discuss?  How about the not so cheap, we’re sorry you didn’t win, but here’s a gift bag valued at $48,000 to heal your wounds?  Most of us would initially think, “Hey, I would be thrilled to take home a gift bag with goodies worth almost $50,000.”  As true as that is, most of us also wouldn’t expect a giant tax bill to come along with that “gift” either.  However, the IRS has made it quite clear that the goody bag handed out on Oscar night is not, in fact, a “gift” for income tax purposes, but taxable income to the recipient.  On the plus side, most of the recipients who are paying taxes on the fair market value of their gift bag would probably consider it chump change anyway.

According to an article in the Huffington Post, the gift bags in prior years have been
worth a tad bit more, even up to $90,000, as in 2010.  I guess those who didn’t win last night should consider themselves lucky that the Academy Awards decided to save them a
few bucks this year.

This entry was posted in Audit & Tax Talk and tagged Accounting. Bookmark the permalink.

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