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Olympic Medal Winners

Posted by Mike C Posted on Aug 06 2012

IRC Sec. 61(a) provides that gross income includes income from whatever source derived, unless there is a specific exclusion. According to a Reuters article dated 8/2/12 entitled Will U.S. Olympic medalists get a tax break? : "Podium athletes get checks $25,000 for gold, $15,000 for silver and $10,000 for bronze and the winnings are taxable for Americans." Remember, former IRS Commissioner Mark Everson's 2006 statement that Oscar goodie bags qualify as taxable income and must be reported on the celebrity's tax return: "We want to make sure the stars 'walk the line' when it comes to these goodie bags." Furthermore, the medals themselves could be seen as valuable gifts that are taxable by the U.S. government. The article adds that the resulting tax liability would vary depending on the recipient's income and tax status: "It could be as much as 35% for, say, basketball players who are already in the top tax bracket; for many athletes it would be less." However, legislation to exclude U.S. athletes from federal income taxation of prize money won at the Olympics has been proposed by U.S. Senator Marco Rubio.

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