MEDIA ALERT - The 91st Academy Awards: Not All of the Surprises at This Year’s Oscars Are in Sealed Envelopes
--(BUSINESS WIRE)--Feb 21, 2019--What: The Academy Awards ceremony has become famous for glamorous gowns, elegant jewelry, and extravagant swag bags. The gowns and jewelry are often on loan from designers seeking to promote their brands, some even paying celebrities to wear and mention the designer on the red carpet. The swag bags given to nominees include over $100,000 worth of free products and services, including travel destinations, beauty products and treatments, jewelry and more, from brands trying to associate them with the celebrities in attendance. The recipients may think of them as gifts, however, in the view of the IRS, since the transfer is done with a profit motive, these are taxable events.
Why: Just like the cars given away by Oprah Winfrey were viewed as taxable to the recipients, when a business gives something of value to a person to promote its business, the recipient is taxable on the fair market value of what is received. In 2006, after the IRS and the Academy reached an agreement on taxing gift bags given to nominees, the Academy ended the practice. However, the practice of giving away gift bags has continued by outside vendors. Similarly, when a designer pays an actress to wear a gown or jewelry, that payment is taxable to the recipient. Should the gown or jewelry be a gift rather than a loan, the value of the gown or jewelry is also taxable. Even the value of the Oscar statue is potentially taxable to the recipients. Some of the tax issues associated with the Oscars include:
Who: Tax expert Mark Luscombe, J.D., LL.M, CPA, Principal Federal Tax Analyst for Wolters Kluwer Tax & Accounting, is available to discuss the potential tax issues surrounding the Oscars and similar tax issues in other settings.
Contact: To arrange interviews with Mark Luscombe or other federal and state tax experts from Wolters Kluwer Tax & Accounting on this or any other tax-related topics, please contact:
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CONTACT: MARISA WESTCOTT
KEYWORD: UNITED STATES NORTH AMERICA CALIFORNIA NEW YORK
INDUSTRY KEYWORD: ENTERTAINMENT LICENSING (ENTERTAINMENT) LUXURY FILM & MOTION PICTURES CELEBRITY GENERAL ENTERTAINMENT PROFESSIONAL SERVICES ACCOUNTING FINANCE RETAIL COMMUNICATIONS FASHION MARKETING
SOURCE: Wolters Kluwer Tax & Accounting
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PUB: 02/21/2019 08:00 AM/DISC: 02/21/2019 08:01 AM