Rubio bill eliminates federal tax on Olympic medals

American · Aug 2, 2012

Rubio bill eliminates federal tax on Olympic medals - Washington Times

By Stephen Dinan
-
The Washington Times

Sen. Marco Rubio introduced a bill Wednesday to eliminate the federal government’s tax on Olympic medals, saying the levy amounted to yet another way the government tries to punish those who succeed.

Athletes who win a gold medal also earn a $25,000 honorarium — and with it an $8,986 tax bill to the IRS, according to Americans for Tax Reform, which crunched the numbers. That covers both the honorarium and the tax on the value of the gold in the medal itself.

The silver medal tax comes to $5,385, and the bronze medal tax is $3,502 — including $2 for the value of the bronze medal itself, and the $10,000 honorarium.

That could leave amateur athletes — in many cases still teenagers — facing stiff tax bills when they return to the U.S.

Mr. Rubio said that shouldn’t happen.

“Our tax code is a complicated and burdensome mess that too often punishes success, and the tax imposed on Olympic medal winners is a classic example of this madness,” the Florida Republican said.

His bill would exempt the honorarium and the value of the Olympic medal itself from any federal taxes.

I'm on the fence about this. I understand the sacrifice these people have made, and I'm not a fan of taxes; especially those that seem excessive like these. However lots of people make huge sacrifices and don't get breaks, so I don't know.

MaggieD · Aug 2, 2012

American said:
Rubio bill eliminates federal tax on Olympic medals - Washington Times

I'm on the fence about this. I understand the sacrifice these people have made, and I'm not a fan of taxes; especially those that seem excessive like these. However lots of people make huge sacrifices and don't get breaks, so I don't know.

We can easily make the case that everyone who pays income tax "amounted to yet another way the government tries to punish those who succeed." I don't see a difference.

Truth be told, it was only this morning I learned that the medals came with a cash award. Gold: $25,000; Silver: $15,000; Bronze: $10,000.

I don't support it.

haymarket · Aug 2, 2012

MaggieD said:
We can easily make the case that everyone who pays income tax "amounted to yet another way the government tries to punish those who succeed." I don't see a difference.

Truth be told, it was only this morning I learned that the medals came with a cash award. Gold: $25,000; Silver: $15,000; Bronze: $10,000.

I don't support it.

Maggie - do you mean you do not support the case award or the tax on it or the exemption for the tax on it?

MaggieD · Aug 2, 2012

haymarket said:
Maggie - do you mean you do not support the case award or the tax on it or the exemption for the tax on it?

I mean I wouldn't support the bill that would exempt it from income tax. I would, however, say that every single nickel spent by the family during that year be deducted from the award -- which, I would think, would put most recipients in the position of having to pay no tax at all.

roughdraft274 · Aug 2, 2012

I think the headline is a bit dishonest. They aren't being taxed on their medals. They're being taxed on income. I don't understand why some income should be tax free on the grounds that it came to them via incredible talents.

Redress · Aug 2, 2012

American said:
Rubio bill eliminates federal tax on Olympic medals - Washington Times

I'm on the fence about this. I understand the sacrifice these people have made, and I'm not a fan of taxes; especially those that seem excessive like these. However lots of people make huge sacrifices and don't get breaks, so I don't know.

http://www.politifact.com/truth-o-m...tax-reform/do-olympic-medalists-owe-9000-irs/

Athletes can already deduct any expenses they incur in for example training from their taxes if they earn a medal, and the 9k tax hit would only apply to an athlete who earns in total over 380k in the year they won the medal.

roughdraft274 · Aug 2, 2012

redress said:
http://www.politifact.com/truth-o-m...tax-reform/do-olympic-medalists-owe-9000-irs/

athletes can already deduct any expenses they incur in for example training from their taxes if they earn a medal, and the 9k tax hit would only apply to an athlete who earns in total over 380k in the year they won the medal.

and the truth shall set you free!

Henrin · Aug 2, 2012

I approve of any step towards eliminating taxes on income.

ARealConservative · Aug 2, 2012

roughdraft274 said:
I think the headline is a bit dishonest. They aren't being taxed on their medals. They're being taxed on income. I don't understand why some income should be tax free on the grounds that it came to them via incredible talents.

they have to claim the the value of the medals as income, so your reply is not accurate

roughdraft274 · Aug 2, 2012

ARealConservative said:
they have to claim the the value of the medals as income, so your reply is not accurate

The only place I can find any information on that is at politifact and their answer is unsure at best.

We checked with accountants who specialize in representing athletes and they agreed that the bonus would almost certainly be taxable. Our experts diverged somewhat over whether and how the medal would be treated for tax purposes

Either way, the value of the medals is very insignificant compared to the award money, so my statement stands. One of the gold medals is valued at 675 dollars and the winnings are 25,000 dollars. I think it's a bit dishonest to act amazed at the huge tax burden that they are receiving because of the gold medals, when in reality the huge majority of it would be coming from the award money. Along with that, politifact points out that after training expense and writeoffs, that most likely they will being either nothing or very small amounts of taxes on this already.

ARealConservative · Aug 2, 2012

roughdraft274 said:
The only place I can find any information on that is at politifact and their answer is unsure at best.

Either way, the value of the medals is very insignificant compared to the award money, so my statement stands.

I find how Politifact interprets what is true and false to be bull****. In this case, for example, they agree that the tax liability could really get as high as $9,000, as that is what the law says. They then go on some rant about how the max amount would likely never get hit, so the true statement is now false. Cookoo, cookoo.

And now you say that since the value of the medal is so low, even if it is taxed, your statement still stands. This isn’t rocket science. You win a monetary award or you win a prize on wheel of fortune, etc, etc, you have to pay tax on the value of those prizes. Money or not. $5,000, or $5, it is taxable income. Athletes are taxed on the medals, which is the opposite of your claim so your statement does not stand.

I rule both politifact and you as liar liar, pants on fire.

roughdraft274 · Aug 2, 2012

ARealConservative said:
I find how Politifact interprets what is true and false to be bull****. In this case, for example, they agree that the tax liability could really get as high as $9,000, as that is what the law says. They then go on some rant about how the max amount would likely never get hit, so the true statement is now false. Cookoo, cookoo.

And now you say that since the value of the medal is so low, even if it is taxed, your statement still stands. This isn’t rocket science. You win a monetary award or you win a prize on wheel of fortune, etc, etc, you have to pay tax on the value of those prizes. Money or not. $5,000, or $5, it is taxable income. Athletes are taxed on the medals, which is the opposite of your claim so your statement does not stand.

I rule both politifact and you as liar liar, pants on fire.

I notice that at no point did you ever provide a credible link actually showing that you're original claim that the medals themselves are definitively taxable. You'd rather just poo-poo on my response.

Politifat has provided you very reasonable conclusions, with plenty of info to back those conclusions up, and I gave you a good response as to why I believe what I believe. You on the other hand have given me a statement with absolutely no proof behind it "they have to claim the the value of the medals as income" and haven't given me an adequate response to my rebuttal (Sorry, i don't consider "cookoo, cookoo" as a proper response) My only conclusion is that you're not really paying attention to what is being discussed here and I'll leave it at that.

joko104 · Aug 2, 2012

How does the cash award not violate the required non-professional status of the athlete? I'm confused.

I see it as grand standing legislation and nothing more.

ARealConservative · Aug 2, 2012

roughdraft274 said:
I notice that at no point did you ever provide a credible link actually showing that you're original claim that the medals themselves are definitively taxable. You'd rather just poo-poo on my response.

I don’t need to. The site didn’t reject that claim you did. Since it is your claim, you prove what you are saying is true.

Politifat has provided you very reasonable conclusions, with plenty of info to back those conclusions up

Their conclusion amounts to nothing but a claim that nobody would ever actually face the highest tax defined by the law.

It’s a bull**** way of claiming something is false as a scenario could exist making it completely true.

ARealConservative · Aug 2, 2012

joko104 said:
How does the cash award not violate the required non-professional status of the athlete? I'm confused.

that requirement has been eliminated, which is how the dream team in 1992 participated.

I see it as grand standing legislation and nothing more.

this I agree with. Athletes should pay taxes just as game show winners should pay taxes.

roughdraft274 · Aug 2, 2012

ARealConservative said:
they have to claim the the value of the medals as income, so your reply is not accurate

roughdraft274 said:
I notice that at no point did you ever provide a credible link actually showing that you're original claim that the medals themselves are definitively taxable. You'd rather just poo-poo on my response.

ARealConservative said:
I don’t need to. The site didn’t reject that claim you did. Since it is your claim, you prove what you are saying is true.

It didn't accept your claim either. If you don't provide any evidence for your claim, the default position is that we don't know which of us are correct. I have already admitted this in my previous post.

Other than that, my point is that either way, the amount paid on the actual medals would be very tiny, or most likely nothing after taking write offs and deductions, and that's assuming that you are correct on your statement, which you've provided no proof of.

VanceMack · Aug 2, 2012

joko104 said:
How does the cash award not violate the required non-professional status of the athlete? I'm confused.

I see it as grand standing legislation and nothing more.

This was one of the concerns. One of the high school age swimmers was in a situation where to maintain her amateur status and compete in college she would have to refuse to accept the money and would still be taxed on the value of her medals.

Havent seen the legislation but I think if they accept the honorarium they should be taxed on everything. If they decline the honorarium it should be donated and the medal should be tax exempt, regardless of worth.

ARealConservative · Aug 2, 2012

roughdraft274 said:
It didn't accept your claim either. If you don't provide any evidence for your claim, the default position is that we don't know which of us are correct. I have already admitted this in my previous post.

Other than that, my point is that either way, the amount paid on the actual medals would be very tiny, or most likely nothing after taking write offs and deductions, and that's assuming that you are correct on your statement, which you've provided no proof of.

so sick of you lying political types. you will argue 1+1 if it is in your political interests.

here you go

Publication 525 (2011), Taxable and Nontaxable Income

to further dumb it donwn for you said:
If the prize or award you receive is goods or services, you must include the fair market value of the goods or services in your income.

ARealConservative · Aug 2, 2012

VanceMack said:
This was one of the concerns. One of the high school age swimmers was in a situation where to maintain her amateur status and compete in college she would have to refuse to accept the money and would still be taxed on the value of her medals.

Havent seen the legislation but I think if they accept the honorarium they should be taxed on everything. If they decline the honorarium it should be donated and the medal should be tax exempt, regardless of worth.

this was a high school requirement. to maintain her ability to race on her high school team, she couldn't take any endorsements. it makes a good point about the money award though

MaggieD · Aug 2, 2012

ARealConservative said:
I find how Politifact interprets what is true and false to be bull****. In this case, for example, they agree that the tax liability could really get as high as $9,000, as that is what the law says. They then go on some rant about how the max amount would likely never get hit, so the true statement is now false. Cookoo, cookoo.

And now you say that since the value of the medal is so low, even if it is taxed, your statement still stands. This isn’t rocket science. You win a monetary award or you win a prize on wheel of fortune, etc, etc, you have to pay tax on the value of those prizes. Money or not. $5,000, or $5, it is taxable income. Athletes are taxed on the medals, which is the opposite of your claim so your statement does not stand.

I rule both politifact and you as liar liar, pants on fire.

Then you don't understand income tax laws. Nobody's pants are on fire...unless you're feeling warm. Then. Drop. Roll.

We have a progressive income tax rate. If an athlete made $380,000 in the year in which he earned the prize money associated with a Gold Medal, it is possible (but highly unlikely) that he could incur a $9,000 tax bill. IF he had absolutely not one deduction.

Athletes are not taxed on their medals. They are taxed on their income.

If you have any idea how much it costs to train for the Olympics, the travel expenses, the cost for trainers, etc., etc., you would know that the $25,000 cash award would be completely written off in a heartbeat.

ARealConservative · Aug 2, 2012

MaggieD said:
Then you don't understand income tax laws. Nobody's pants are on fire...unless you're feeling warm. Then. Drop. Roll.

We have a progressive income tax rate. If an athlete made $380,000 in the year in which he earned the prize money associated with a Gold Medal, it is possible (but highly unlikely) that he could incur a $9,000 tax bill. IF he had absolutely not one deduction.

Athletes are not taxed on their medals. They are taxed on their income.

If you have any idea how much it costs to train for the Olympics, the travel expenses, the cost for trainers, etc., etc., you would know that the $25,000 cash award would be completely written off in a heartbeat.

The progressive tax policy has no bearing on whether this is true or false.

It is possible that the tax on a gold medal prize can be as high as $9,000.

All Norquist said is the tax can be as high as $9,000.

ps - the fair market value of their medal must be reported a income.
So anybody that claims what he said is mostly false, is mostly a liar.

roughdraft274 · Aug 2, 2012

ARealConservative said:
so sick of you lying political types. you will argue 1+1 if it is in your political interests.

here you go

Publication 525 (2011), Taxable and Nontaxable Income

Be mad at the experts that can't agree on the issue. I'm not saying I know for sure either way if the medals are taxable. I'm saying that because no one as of yet has given us conclusive evidence on the issue. The only source we have is one that says "experts are divided". Now who's being more partisan, the guy (you) who is saying "I know for sure, and I don't need evidence" or the guy saying (me) "I'm not sure, there isn't any evidence one way or another"?

ARealConservative · Aug 2, 2012

roughdraft274 said:
Be mad at the experts that can't agree on the issue. I'm not saying I know for sure either way if the medals are taxable. I'm saying that because no one as of yet has given us conclusive evidence on the issue. The only source we have is one that says "experts are divided". Now who's being more partisan, the guy (you) who is saying "I know for sure, and I don't need evidence" or the guy saying (me) "I'm not sure, there isn't any evidence one way or another"?

I can understand how experts are divided on how to obtain the fair market value of an award, but no knowledgeable tax accountants would claim the prize itself wasn’t to be considered taxable income. The few exceptions that do exist (such as a safety achievement award) would definitely not apply in the case of an athlete.

The tax loopholes that would be created by exempting a gold medal award makes me wish it were true, but it isn’t.

tessaesque · Aug 2, 2012

I don't think we should be worrying about eliminating taxes for any athlete's income.

Do the military pay taxes on their income? If anybody's getting a break I think it should be them...

roughdraft274 · Aug 2, 2012

ARealConservative said:
I can understand how experts are divided on how to obtain the fair market value of an award, but no knowledgeable tax accountants would claim the prize itself wasn’t to be considered taxable income. The few exceptions that do exist (such as a safety achievement award) would definitely not apply in the case of an athlete.

The tax loopholes that would be created by exempting a gold medal award makes me wish it were true, but it isn’t.

We checked with accountants who specialize in representing athletes and they agreed that the bonus would almost certainly be taxable. Our experts diverged somewhat over whether and how the medal would be treated for tax purposes

http://www.politifact.com/truth-o-m...tax-reform/do-olympic-medalists-owe-9000-irs/

Rubio bill eliminates federal tax on Olympic medals

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