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Tax Agreement Puts End to Oscar Swag


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12 replies to this topic

#1 of 13 OFFLINE   Henry Gale

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Posted August 17 2006 - 12:40 PM

Movie stars appearing at the Academy Awards will no longer receive the lavish goodie bags they have come to expect -- worth as much as $100,000 each and including freebies such as iPods, resort vacations, coupons for laser eye surgery, jewelry and high-priced lingerie -- because of a crackdown by federal tax collectors.

http://www.washingto....081700844.html
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#2 of 13 OFFLINE   Holadem

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Posted August 17 2006 - 12:43 PM

This is terrible news. Poor things.

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#3 of 13 OFFLINE   MatthewLouwrens

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Posted August 17 2006 - 01:27 PM

Although the article starts out saying they won't be getting the bags any more, that doesn't seem to be true, based on the rest of the article. The recipients simply have to pay taxes on the items as non-cash income.

Quote:
Academy spokesman Leslie Unger did say that participants in this year's Oscars are being notified they will have to pay taxes on bags they received at the awards in March, but that participants in previous years will not receive tax forms for goods they were given.

Similar talks are underway between the IRS and the Academy of Television Arts & Sciences, which hosts the Emmy Awards. The television academy sent out letters recently to stars who will be participating in this year's Emmys in 10 days, saying no one would receive a bag -- known in the industry as swag -- without signing a statement acknowledging recipients bear responsibility for paying taxes on the goods.

The Internal Revenue Service in March, just before this year's Oscar awards, announced that the bags were not gifts but rather "non-cash compensation" and therefore taxable. The IRS said the Motion Picture Academy and anyone else giving away such goods should have been filing forms with the IRS stating who received a bag and its value. Each recipient should have counted the goods as taxable income.

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#4 of 13 OFFLINE   Adam_S

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Posted August 18 2006 - 05:18 AM

I've never thought it was fair that the government is supposed to get a share of your gifts as well, that's why I don't report bday or grad money (not like I'm getting a lot, more or less pocket money. On the other hand I can understand with the high value of the gifts why there's a limit, otherwise what's to prevent each person from gifting their year's salary to their spouse (and vice versa) and neither having to pay any taxes?

The sad part is that while the presenters don't necessarily need the swag it literally has made the careers of many of the people lucky enough to get included (it's sort of like getting a product into wal-mart in terms of the success the various individuals and boutiques garner from it for the rest of the year).
 

#5 of 13 OFFLINE   Chad R

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Posted August 19 2006 - 01:33 AM

What about George Clooney who sold his bag off at auction for charity? Would he have to pay taxes and then turn around and write it off as a charitable donation?

#6 of 13 OFFLINE   mattCR

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Posted August 19 2006 - 02:09 AM

I do agree, though, they are basically not "gifts" but they are used as a means to promote and advertise product. Every person who stuffs something in that bag does so hoping that Reese Witherspoon will be seen going to their store with a gift certificate. Or Jim Carrey will try out a new iPod. Or whatever. They are being paid for promoting it by receiving an item free.

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#7 of 13 OFFLINE   seanOhara

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Posted August 19 2006 - 02:28 AM

It's my understanding that all nominees get these bags, not just the rich stars. This will really suck for writers and editors and anyone involved with an indie film that gets nominated.
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#8 of 13 OFFLINE   ToddP

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Posted August 19 2006 - 09:53 AM

You don't have to report birthday or grad money (maybe I misinterpreted and this was a joke/sarcasm). Gifts up to $11k in value are exempt from taxation.

#9 of 13 OFFLINE   Adam_S

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Posted August 19 2006 - 12:09 PM

sarcasm todd. Posted Image

I believe the presenters are given the giantly huge valuable baskets as their only thank you/compensation for presenting. Since presenters are usually the top of A list actors, that makes sense. I can't remember about the nominees, they may not get a gift basket, if they do it is much smaller. On the other hand, most will get gift baskets from their studios, production companies, colleagues, friends and family. they just aren't likely to include plastic surgery and 30k vacations
 

#10 of 13 OFFLINE   Lew Crippen

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Posted August 20 2006 - 01:08 AM

Quote:
Originally Posted by Adam_S
sarcasm todd. Posted Image

I believe the presenters are given the giantly huge valuable baskets as their only thank you/compensation for presenting. Since presenters are usually the top of A list actors, that makes sense. I can't remember about the nominees, they may not get a gift basket, if they do it is much smaller. On the other hand, most will get gift baskets from their studios, production companies, colleagues, friends and family. they just aren't likely to include plastic surgery and 30k vacations
Presenters are ‘working’ and the packages they receive are now (and should always have been) considered ‘pay’ or ‘compensation’. As such, it should be taxed.
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#11 of 13 OFFLINE   MatthewLouwrens

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Posted August 20 2006 - 01:33 PM

Quote:
What about George Clooney who sold his bag off at auction for charity? Would he have to pay taxes and then turn around and write it off as a charitable donation?
From the CNN article about this issue:
Quote:
George Clooney donated his Oscar swag bag to United Way. It fetched $45,100 at auction, benefiting the United Way Hurricane Response and Relief Recovery Fund. Clooney may be eligible for a tax deduction.

The bag, given to presenters at the 78th Annual Academy Awards, included a BlackBerry 8700c, a Kay Unger kimono and a cultured Tahitian-pearl necklace. Clooney also took home another prize -- best supporting actor for "Syriana."

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#12 of 13 OFFLINE   Paul McElligott

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Posted August 21 2006 - 03:57 AM

Quote:
Originally Posted by The Beatles

If you drive a car, I’ll tax the street;
If you try to sit, I’ll tax your seat;
If you get too cold, I’ll tax the heat;
If you take a walk, I'll tax your feet.

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#13 of 13 OFFLINE   Chris Lockwood

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Posted August 21 2006 - 08:11 AM

I don't see why they'd have to stop giving the bags- the recipients just need to pay the taxes on them. They could give back anything they don't think is worth the taxes.

This is really nothing new- stuff like that has always been considered taxable income. It's much like prizes on a game show. You'd think most of the recipients would have accountants doing their taxes who would know that. (I knew it, & I'm no accountant.)


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