This year's Oscar swag bags are filled with tax consequences for nominees
Posted by AccountingWEB in Tax, Income Tax, Celebrity News on 03/03/2011 - 19:15
Besides getting to don designer clothing and jewelry and pose for hundreds of photo ops on the red carpet, the members of the motion picture industry who are lucky enough to present or be nominated for an Academy Award also receive bags of goodies.
The Everyone Wins at the Oscars Nominee Gift Bag is "an eclectic fusion of fun, fabulous, and functional meant to titillate and indulge those who may have everything but still enjoy experiencing one of the industry's greatest rewards: swag," according to a press statement issued by Distinctive Assets, the company responsible for filling the bags.
But while Oscar nominees and presenters sift through their treasures, the IRS is lurking around the corner, ready and waiting to grab its share of the take. Swag bag recipients are reminded that the fair market value of the bag contents is considered taxable income and is to be reported on the tax return of the person receiving the gift.
If a bag recipient chooses to donate some or all of the bag's contents to charity, a charitable contribution tax deduction might be available, depending on the person's individual tax situation, but that doesn't change the fact that the value of the bag is taxable income.
According to the Academy of Motion Picture Arts and Sciences, 2011 swag bag recipients can expect to receive "informational tax forms" from the Academy. One would assume that this refers to 1099-MISC forms, but the notice from the Academy doesn't specifically identify the type of tax forms that will be provided.
Distinctive Assets claims that the bags, valued at more than $75,000 each, contain trips, clothing, cosmetic products, and more. Here's a sample of some of the items that have been reported:
$15,000 African Safari
$5,000 all-inclusive week-long fitness retreat
$12,000 Belize getaway to a private island
Shapewear
Electronic cigarettes
Chocolate jewelry box
Kim Kardashian signature watch collection
Fitness personal training package
Portion control dishware
Face and nasal products
Odor eliminator
Virgin Galactic sub-orbital space craft scale model
Stain removal kit
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