US and taxation

[Larry1]

However, the actual fair market value of an Olympic Gold medal is probably much higher; if any of them would want to sell.

During the Olympic coverage there was a story on one of the athletes who had won a medal something like 15 years ago and had to sell it. He got $17,000 or $18,000 from the sale.

[msmobyone]

During the Olympic coverage there was a story on one of the athletes who had won a medal something like 15 years ago and had to sell it. He got $17,000 or $18,000 from the sale.

That depends on the winner's achievement and the price the bidder is prepared to pay...

Are you saying it is 'correct' to tax a medal winner?

[Muzh]

Are you assuming this is the only income for the person?

Those winning medals will pay taxes at their marginal tax rate . . . i.e. at the highest tax bracket they are in.

For those with substantial endorsement money, they will pay taxes at around a 50% rate, meaning half the value of the medal will go to the U.S. Treasury for the benefit of the rest of we citizens.

However, the actual fair market value of an Olympic Gold medal is probably much higher; if any of them would want to sell.

Okay, okay.


So, Phelps, for example, won 5 gold medals in Rio. That's ~$2800. So he will have to pay taxes on $25,000,000 + $2800. That's tough. The extra money bumped him up to the same bracket. Tough luck for this guy.

[LiveFromUkraine]

Are you saying it is 'correct' to tax a medal winner?

Moby, people are saying it's the law.  The taxes are offset by the expenses in any case.  Kind of crazy for you to get all excited about something this trivial when you have rape epidemics all over Europe.     I'm joking.

[GuppyCaptain]

Okay, okay.


So, Phelps, for example, won 5 gold medals in Rio. That's ~$2800. So he will have to pay taxes on $25,000,000 + $2800. That's tough. The extra money bumped him up to the same bracket. Tough luck for this guy.

That's not the point. The point is the principle behind the matter. Spoken like a true liberal. "They're rich, another $XXXX isn't going to hurt them". Personal opinion.....it's an absolute disgrace to tax an Olympian for medals that he/she won while representing the country for which he/she won them for. Gimme a break. 

[GuppyCaptain]

The IRS does not establish tax laws. 

Our Congress does that.

IRS only tries to enforce the tax laws.

You are correct. The IRS has gotten very aggressive enforcing those laws the last several years. Example: American pilots that are foreign based AND living abroad  (think Emirates, Korean Air, etc.) flying international flights are now being required to break down what portion of the flight was over international airspace and what portion was over U.S. airspace to determine what portion of their salary will be exempt from U.S. tax liability.

[Boethius]

That's not the point. The point is the principle behind the matter. Spoken like a true liberal. "They're rich, another $XXXX isn't going to hurt them". Personal opinion.....it's an absolute disgrace to tax an Olympian for medals that he/she won while representing the country for which he/ensshe won them for. Gimme a break. 

If Olympians are allowed to deduct all their expenses, it only makes sense that they are taxed on winnings.

[GuppyCaptain]

If Olympians are allowed to deduct all their expenses, it only makes sense that they are taxed on winnings.

Perhaps their monetary winnings. I have a big problem with them getting taxed on medals. Call me a man of principle....

[2tallbill]

If athletes can deduct all their expenses (training, flights, equipment, food, etc.), then the income inclusion is fair, and it gives symmetry to the system.  It probably works out to the athletes' advantage.

I have a problem with getting taxed on the value of the medal itself.
They shouldn't be taxed in my opinion on the medal unless they sell it.
The cash yes, they should be taxed on that, the endorsements sure, but
a medal that they were given? they should be able to keep it without taxes
unless that medal is sold since they didn't realize the gain.

[GuppyCaptain]

Now that right there seems like a very reasonable compromise ^^^^

[Boethius]

Yes, I agree that taxing athletes on the fair market value of the medals is unfair.

[Muzh]

That's not the point. The point is the principle behind the matter. Spoken like a true liberal. "They're rich, another $XXXX isn't going to hurt them". Personal opinion.....it's an absolute disgrace to tax an Olympian for medals that he/she won while representing the country for which he/she won them for. Gimme a break. 

I understand that you find disgraceful to tax the rich and instead you should pay their taxes. What I don't understand is why. 

[GuppyCaptain]

I understand that you find disgraceful to tax the rich and instead you should pay their taxes. What I don't understand is why. 

No sense in arguing with the liberal mentality of taxing the rich/well off to death. Carry on.....

[Muzh]

No sense in arguing with the liberal mentality of taxing the rich/well off to death. Carry on.....

Typical cop out. 

[TigerPaws]

[TigerPaws]

[Muzh]

Heh, I guess you missed the graph of spending by past presidents. There should be elephants in there instead of donkeys. That's what happens when you drink the Kool aid.

[TigerPaws]

Liberals are SO predictable, it could have been both a donkey and and elephant and your would try to justify you point of view.

[LiveFromUkraine]

Liberals are SO predictable, it could have been both a donkey and and elephant and your would try to justify you point of view.

So...  that sounds like you agree with Muzh and it hurt a little.   

[Slumba]

Heh, I guess you missed the graph of spending by past presidents. There should be elephants in there instead of donkeys. That's what happens when you drink the Kool aid.

California's political system is nearly 100% Democrat at this point and has been for years.

[Muzh]

So...  that sounds like you agree with Muzh and it hurt a little.   

 


He got the cooties.

[2tallbill]

The IRS does not establish tax laws. 

Our Congress does that.

IRS only tries to enforce the tax laws.

The IRS writes regulations which become defacto laws. The congress can say that a
Russian woman's child can apply for and get a ITIN, but then the IRS can make up all kinds
of silly regulations, like You must apply for the ITIN in person with the child present and
all the paperwork including the tax return ready to file at that time. They will have the
form at the location but they won't have the instructions at the location. If you need the
ITIN for a future year then you must wait for the future year to come around before they
allow you to apply for it (again only in person with the child)

The IRS needs to be abolished.

[Anotherkiwi]

As far as I know, winning a medal at the Olympics does NOT result in a payment to anyone FROM THE GAMES THEMSELVES - sorry, bud, you're only in it for the glory!  To me, I don't see how the USA (or any other country) can justify taxing an athlete who has done only what everyone in their country had hoped/expected them to do.  Also, if you're being taxed on the theoretical future sale value of the medal (which I think is obscene to start with), are they also going to tax you on, for example, the sale of unwanted wedding presents?  I mean, what are you going to do with SIX toasters?  How can you start to ascertain what is or isn't taxable in this sense?

If, however, their country's Olympic or other sporting body then makes a cash payment to the athlete for that performance, it's a different matter.  That, to me, is income, and should be taxed accordingly (or not, if there's something in the country's tax laws which allow it as a non-taxable or ex-gratia type payment).  The same with any additional sponsorship which the athlete picks up as a result of that performance - surely it will end up in their tax return the following year in any case (minus all the legitimate deductions for first-class caviar travel around the world, of course!).

And, as an aside, New Zealand is like the UK - lottery, horse racing or casino wins are tax-free.    If you convert any of those winnings to income (e.g. by purchasing an annuity to fund your immediate retirement  ), however, you will end up paying tax.  If you just draw down odd amounts from the bank, you won't.

[GuppyCaptain]

Typical cop out. 

Cop out?! Really?! What's your justification for taxing a person making 250K at a rate 2-3X higher than a person a person making 40K annually?

Lemme guess.... "Spread the wealth", right?

[GuppyCaptain]

Good points, Kiwi. Another outrage in the States......inheritance tax. WTF business is it of the federal government as to what a parent wills to child?!