Taxing Gold

[ILLMAS]

Maybe this is the reason why some players were losing on purpose?

http://msn.foxsports.com/olympics/story/US-medal-winners-pay-stiff-price-in-taxes-080212

[Elrod]

Uncle Sam................Gimme....Gimme...Gimme.

[JohnH]

They ought to pay tax on those medals they claim they "won".

After all, they didn't really do that.

Somebody else made that happen.

They honed their running skills at taxpayer-funded universities, learned to swim in public pools, and drove to their practices on government-funded roads. Lots of their coaches, teachers, and trainers were government employees. Somebody taught them how to count - otherwise the wouldn't even be able to keep score.

I get tired of hearing people say they won a medal because they are skilled athletes or they worked hard. Let me tell you, there are lots of ordinary people who exercise every day and they don't get medals.

These athletes should share the medals with all of us. If they refuse to do that, we can count on our government to make them do the right thing and give back.

[Randall]

I agree JohnH. I've tried to keep jogging for 36 years. It's tough to keep it up and find the time but I do it for myself and my health. Yes, these are great athletes, but so what. Then they come home and get their face on the box of Cheerios and become hucksters and make big bucks. Sheesh.

[Terry O]

Question - -is it a "Prize" or self employment? You could argue it either way - - - I do NOT have any of the local winners (Bflo area has 3) Just wondering - - -

[Elrod]

I'm gonna just sit here, gnawing on my bananna....stay off the roads...outta da water...just look around at stuff.

And hope I don't get taxed too heavily on the money it took to get this, dang bananna.

[JohnH]

Just remember you didn't earn the right to that banana - somebody else made it happen.

And they work for the government.

[taxxcpa]

I see no more reason why the income of a great athlete should be treated any different than a great ditch-digger or a great tax preparer.

Is the Nobel prize exempted from tax?

Of course, the government made it happen so maybe they should pay a surtax.

[JohnH]

Great question. I wonder if Nobel prize winners pay tax on the value of the gold medal as well as on the money they receive.

[Elrod]

I recycle my bananna skin...

I make that happen...

Compost to my mato plants...

When I crunch on mato.....Did I earn the right to?

I no work for government.

[JohnH]

I see you're struggling with the concept.

The government built the road that delivered the banana to your grocery store.

Unless you have your own banana tree, you still didn't make it happen.

See?

The president can make the point much more eloquently than I can - maybe you should consult him for clarification.

[Elrod]

Nah!...But...Thanks Jonn.

[Don in Upstate NY]

I wonder if Nobel prize winners pay tax on the value of the gold medal as well as on the money they receive.

From the IRS website ...

Pulitzer, Nobel, and similar prizes. If you were awarded a prize in recognition of accomplishments in religious, charitable, scientific, artistic, educational, literary, or civic fields, you generally must include the value of the prize in your income. However, you do not include this prize in your income if you meet all of the following requirements:

• 
  
  
  You were selected without any action on your part to enter the contest or proceeding.
  
• 
  
  
  You are not required to perform substantial future services as a condition to receiving the prize or award.
  
• 
  
  
  The prize or award is transferred by the payer directly to a governmental unit or tax-exempt charitable organization as designated by you.
  

See Publication 525 for more information about the conditions that apply to the transfer.

[kcjenkins]

I think that while they do tax the value of the cash award, they do not include the price of the metal in the medal. Although that is something that a smart auditor certainly would include, since the price of gold and silver has increased so much in the last few years.

As for taxing the prize, why shouldn't they? Frankly, that's part of what is wrong with our tax code, too many emotional exceptions Why should a person who works hard to win a race be treated differently than someone who works hard to sell enough cars to win a bonus, for example?

[BulldogTom]

Because neither of them made that happen. The government bailout of GM and Chrysler made the car sales happen, and that ungrateful salesman should have to pay more in taxes because of it.

Tom

Hollister, CA

[Lion EA]

And, the amount of precious metals in the medals is very small this year, so the cash value is very small this year. So, not much to add to the $10-25,000 cash compensation -- IF it has to be added in. Does the IOC send 1099-MISCs? I know, if I have an Olympic champion I need to ask them what they received. Just wondering if it's anything that's been explained to the Olympians with all the time, travel, stress, etc., running up to the games.

[kcjenkins]

According to the Olympic Charter, the gold and silver medals must each be made of at least 92.5 percent pure silver and the gold medal must be gilded with at least six grams of gold.

The price of gold changes daily. Assuming there's six grams of gold in each medal, at 31.1 grams per troy ounce, that is about 0.2 troy ounces. With gold at $1100 per troy ounce, the value would be about $212.

The remainder of the gold medal is made out of silver. The price of silver also fluctuates, but at an average of $14.50 per troy ounce, and assuming the entire medal weighs 500 grams, the remaining silver in the gold medal hovers around $230, bringing the total value to around $450.

They should send 1099's, don't know if they do or not. If they do, don't know if they include the $450 or not.

[taxxcpa]

I can see not taxing the medal itself. The value would not be all that significant and it would not be something you would sell.

[Jack from Ohio]

I can see not taxing the medal itself. The value would not be all that significant and it would not be something you would sell.

I can see the logic in your idea. However, what makes you think that any of our lawmakers make any tax law based on logic??

I'm just sayin....

[ILLMAS]

Maybe it's not a bad idea after all, Michael Phelps is expected to earn 100 mil in endorsements over the course of 10 years.

[Don in Upstate NY]

I can see not taxing the medal itself. The value would not be all that significant and it would not be something you would sell.

Not so.

http://abcnews.go.com/Sports/story?id=100405&page=1

[Randall]

Wow on the metal content! Somewhere I got it in my head that the gold medal was 5 ounces of gold. That would be quite a bit. 6 grams sounds more reasonable.

[Randall]

l think that while they do tax the value of the cash award, they do not include the price of the metal in the medal. Although that is something that a smart auditor certainly would include, since the price of gold and silver has increased so much in the last few years.

As for taxing the prize, why shouldn't they? Frankly, that's part of what is wrong with our tax code, too many emotional exceptions Why should a person who works hard to win a race be treated differently than someone who works hard to sell enough cars to win a bonus, for example?

I agree KC. Emotions.

[GeneInAlabama]

>>Maybe it's not a bad idea after all, Michael Phelps is expected to earn 100 mil in endorsements over the course of 10 years.<<

If he does, he will pay tax on it as he earns it. (I hope)

[joanmcq]

Since the cash prizes are awarded by the US Olympic committee, I would assume 1099s would have to be issued. The cash prizes aren't part of the Olympics itself.

Remember when the athletes had to be amateurs? These days most of the winners in the popular sports are professional athletes; either true pros like our basketball players, or through endorsements like Phelps. Therefore I see no reason the prize wouldn't be taxed, and if pro, ordinary & necesary expenses deducted, and SE tax imposed.

For amateurs, the prize should not be subject to SE.