If you watch any of the award shows on television, you are probably aware of the trend towards elaborate gift bags or baskets being given to celebrity award presenters. These "gifts" of jewelry, cosmetics, vacations, electronics, clothing and other similar items have skyrocketed in value, with some being valued at over $100,000. A typical viewer's jealous reaction is something like "these guys get paid millions of dollars to sing songs or act in movies, and then they get all this free stuff, too - that's not fair!"
Well if it makes our jealous viewer feel any better, the Commissioner of the Internal Revenue Service recently reminded celebrity recipients of the gift bags that they qualify as taxable income and must be reported on tax returns. Indeed, some of the recipients that aware of this have declined the bags since the taxes are probably more than the real value of the gifts to them.
To read the Comissioner's statement, click here.
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