The 95th Academy Awards, also known as the Oscars, will be held on Sunday, March 12, at the Dolby Theatre in Los Angeles, the $126K Oscar gift bags 2023 are claimed as federal income taxes.
$126K Oscar Gift Bags 2023 Have To Claim In Federal Income Taxes, IRS Says! (PHOTO: King 5 News)
$126K Oscar Gift Bags Are Taxible?
Oscar nominees who accept gift bags must claim them on their federal income taxes. That’s because the IRS treats these swag bags as payment, and says they don’t satisfy the definition of gifts. According to the IRS website, these gift bags are not gifts for federal income tax purposes because the organizations and merchants who participate in providing the gift bags do not do only out of devotion, respect, or similar impulses for the recipients of the Oscar gift bags.
In the early 1970s, the Academy of Motion Picture Arts and Sciences launched its gift basket program as a way to say thank you to presenters and performers at the Oscars event. The gift baskets usually included luxurious trips, expensive jewelry, and other fancy gadgets. However, in April 2006, the Academy told it would no longer hand out any gift baskets after confronting backlash from the IRS because the agency said that movie stars are not paying taxes on the gifts they received. By Aug. 17, 2006, the IRS and the Academy reached an agreement to resolve the tax issues about the gift baskets that were given away at the Oscars through 2005. The agreement let any person who received an Oscar gift basket before 2006 off the hook for paying taxes on Oscar gift bags.
IRS Say That Persons Who Accept Gift Bags Has To be Taxable Income
According to the IRS, any person that receives the Oscar gift bags during the awards show “has received taxable payment similar to the fair market value of the bag and its contents and must report that amount on his or her federal income tax return.” If a person redeems a non-transferable gift certificate, a voucher for a trip, or a personal benefit that was located in the gift bag, they must also report it on their taxes. Gift bag recipients are permitted to donate the Oscar gift bags to charity and can receive a tax deduction but the IRS says they always have to claim the gifts as income on their tax return.
Distinctive Assets, a Los Angeles-based entertainment marketing company that is not affiliated with the Academy, has been distributing Oscar gift bags to the top acting and directing nominees at the Oscars award for over 20 years. Their 2023 “Everyone Wins” nominee Oscar gift bag is valued at about $126,000. It contains skincare products, perfumes, trip vouchers, and even cosmetic surgery procedures. In an email, Distinctive Assets founder Lash Fary said that the Oscar gift bags his company offers to considered business gifts by the IRS.
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