# Olympics winnings exempted from taxation **URL:** \ **Category:** In My Humble Opinion\ **Created:** [October 10, 2016, 9:46pm UTC](https://boards.straightdope.com/t/olympics-winnings-exempted-from-taxation/768188 "2016-10-10T21:46:52Z")\ **Posts on this page:** 20\ **Page:** 2
**Author:** ![Lamar\_Mundane](https://avatars.discourse-cdn.com/v4/letter/l/85f322/32.png) [@Lamar\_Mundane](https://boards.straightdope.com/u/Lamar_Mundane)\ **Post date:** [October 11, 2016, 2:42pm UTC](https://boards.straightdope.com/t/olympics-winnings-exempted-from-taxation/768188/21 "2016-10-11T14:42:45Z")
> [@JRDelirious](#): > > Ah, but you see, the Nobel or Pulitzer laureate did not work for her achievements in the name of USA!USA!USA! This is true and I have absolutely no problem with it. The Nobel Laureate goes back to her existing job at a higher profile and higher salary and a job for life. The kayaker or water polo player has to start a career from scratch a few years behind his peers. A few bucks from us (much less than we get from our mortgage interest deduction) is fine by me. ---
**Author:** ![kopek](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kopek/32/337_2.png) [@kopek](https://boards.straightdope.com/u/kopek)\ **Post date:** [October 11, 2016, 4:41pm UTC](https://boards.straightdope.com/t/olympics-winnings-exempted-from-taxation/768188/22 "2016-10-11T16:41:47Z")
> [@OldGuy](#): > > I wouldn’t mind at all if the law made the value of the metal in the medal tax exempt, and that’s what I thought they were doing. But I think any cash award should be taxable income. I’m thinking along these lines especially since the medals and money come through different sources. ---
**Author:** ![Telemark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/telemark/32/372_2.png) [@Telemark](https://boards.straightdope.com/u/Telemark)\ **Post date:** [October 11, 2016, 5:02pm UTC](https://boards.straightdope.com/t/olympics-winnings-exempted-from-taxation/768188/23 "2016-10-11T17:02:36Z")
> [@OldGuy](#): > > I wouldn’t mind at all if the law made the value of the metal in the medal tax exempt, and that’s what I thought they were doing. But I think any cash award should be taxable income. The value of the metal in the medals isn’t very much. The gold medals are silver cores, just plated with gold. ---
**Author:** ![running\_coach](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/running_coach/32/15836_2.png) [@running\_coach](https://boards.straightdope.com/u/running_coach)\ **Post date:** [October 11, 2016, 5:06pm UTC](https://boards.straightdope.com/t/olympics-winnings-exempted-from-taxation/768188/24 "2016-10-11T17:06:08Z")
> [@OldGuy](#): > > I wouldn’t mind at all if the law made the value of the metal in the medal tax exempt, and that’s what I thought they were doing. But I think any cash award should be taxable income. The gold medal is [silver with gold plate.](http://time.com/money/4418118/olympic-medal-worth-value/) > [@](#): > > The first and easiest way of calculating the value of a Olympic gold medal is figuring what the metal is worth if one were melted down. Since the Mexico games in 1968, the medals have averaged 65.8 millimeters in diameter, 6.5 millimeters in thickness, and 176.5 grams in weight. London’s were the largest, at between 375 and 400 grams. > > But gold medals aren’t made of gold, not entirely anyway. Only about six grams of each medal are 24-karat gold; the rest is sterling silver. (“Sterling” means 92.5% silver and the rest copper.) In today’s values, that makes the average gold medal worth around $366. London’s bigger golds are worth $501 nowadays. (At the high 2012 precious metals prices, the medals from London would have been worth around $777.) ---
**Author:** ![dracoi](https://avatars.discourse-cdn.com/v4/letter/d/90db22/32.png) [@dracoi](https://boards.straightdope.com/u/dracoi)\ **Post date:** [October 11, 2016, 5:32pm UTC](https://boards.straightdope.com/t/olympics-winnings-exempted-from-taxation/768188/25 "2016-10-11T17:32:21Z")
> [@Lightray](#): > > I’m skeptical that someone up for a Nobel or Pulitzer would be on the poorly-paid range of their career salary. Certainly, after winning either, I’d expect their salary to go up, regardless of endorsements. And remain higher for the remainder of their career life. > > Olympians, on the other hand, have to move into _another_ career after aging out of the Olympics. Except for an extremely small handful of athletes (e.g., Phelps), the Olympics isn’t their career. In some sports, like women’s gymnastics, they effectively have one or maybe two Olympiads to recoup all the costs of their training. And the endorsements end after they move on from the sport. They might get some residual income in later years from appearances and such, but again except for a handful of Olympians, it’ll be a relative pittance. > > Meanwhile, they have to move on to a new career, handicapped by having missed out on career development in the years they were training. > > Not that I’d object at all to a tax exemption for Nobel or Pulitzer prizes, but I can see why giving a relatively minor break to Olympians makes sense. And, really, most Olympians won’t even get _this_ since they don’t medal and so won’t get any medal money. I agree with almost everything you’ve said here except that the solution is a specific tax exemption. I work in the tax field and I have to be honest with you: we’re already at a point where nobody can keep track of all this stuff. It’s easy enough to think of one exemption like this, but there are hundreds of exemptions like this. Special deductions for low-income performers, rural mail carriers, clergy, notaries public, manufacturing, software development, construction, real estate professionals… You can only load on so much crap before the system becomes unusable. If we want to make sure the Olympic athletes are properly treated from a financial standpoint, then just pay them more. If $50,000 is subject to 20% in taxes, then pay them $62,500. That’s how you fix this problem. ---
**Author:** ![Lightray](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lightray/32/391_2.png) [@Lightray](https://boards.straightdope.com/u/Lightray)\ **Post date:** [October 11, 2016, 6:24pm UTC](https://boards.straightdope.com/t/olympics-winnings-exempted-from-taxation/768188/26 "2016-10-11T18:24:22Z")
I think the big problem of this tax break is that it’s only the _medal winners_ who get it. Sends a rather ugly message of “we only like winners”. _Most_ Olympians won’t come back with a medal, yet suffer the same disadvantages for their Olympic attempt as the winners do. It’s basically the same outrage that people experience when they learn that winning a million bucks doesn’t actually mean that they’ll be _getting_ a million bucks, or that when Oprah gives them a free car they might have to sell it to pay the taxes owed on the gift. ---
**Author:** ![Fiveyearlurker](https://avatars.discourse-cdn.com/v4/letter/f/da6949/32.png) [@Fiveyearlurker](https://boards.straightdope.com/u/Fiveyearlurker)\ **Post date:** [October 11, 2016, 6:39pm UTC](https://boards.straightdope.com/t/olympics-winnings-exempted-from-taxation/768188/27 "2016-10-11T18:39:32Z")
> [@Lamar\_Mundane](#): > > This is true and I have absolutely no problem with it. The Nobel Laureate goes back to her existing job at a higher profile and higher salary and a job for life. The kayaker or water polo player has to start a career from scratch a few years behind his peers. A few bucks from us (much less than we get from our mortgage interest deduction) is fine by me. The Nobel Laureate spent decades in a poorly paid career (have you looked at the career trajectory of a scientist these days? PhD at about 30, postdocs paid at 40K per year for another 4-10 years. You’re 40 before you even have a chance to be an independent scientist.) The kayaker is likely in his early 20s. Apples and oranges. ---
**Author:** ![Dewey\_Finn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dewey_finn/32/4222_2.png) [@Dewey\_Finn](https://boards.straightdope.com/u/Dewey_Finn)\ **Post date:** [October 11, 2016, 6:51pm UTC](https://boards.straightdope.com/t/olympics-winnings-exempted-from-taxation/768188/28 "2016-10-11T18:51:19Z")
> [@boffking](#): > > This is what Obama wastes his time on? It’s not like we have poorly mismanaged wars going on or crumbling infrastructure in our own nation. Oh wait, we have both those issues. That is the silliest argument. Do you think that the White House only deals with one issue at a time? ---
**Author:** ![Lamar\_Mundane](https://avatars.discourse-cdn.com/v4/letter/l/85f322/32.png) [@Lamar\_Mundane](https://boards.straightdope.com/u/Lamar_Mundane)\ **Post date:** [October 11, 2016, 7:14pm UTC](https://boards.straightdope.com/t/olympics-winnings-exempted-from-taxation/768188/29 "2016-10-11T19:14:01Z")
> [@Fiveyearlurker](#): > > The Nobel Laureate spent decades in a poorly paid career (have you looked at the career trajectory of a scientist these days? PhD at about 30, postdocs paid at 40K per year for another 4-10 years. You’re 40 before you even have a chance to be an independent scientist.) > > The kayaker is likely in his early 20s. > > Apples and oranges. Nobel Laureates aren’t the average college professor. They’re probably a full prof at a major University in their early 30’s with a number of schools trying to recruit them. ---
**Author:** ![Dewey\_Finn](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dewey_finn/32/4222_2.png) [@Dewey\_Finn](https://boards.straightdope.com/u/Dewey_Finn)\ **Post date:** [October 11, 2016, 7:18pm UTC](https://boards.straightdope.com/t/olympics-winnings-exempted-from-taxation/768188/30 "2016-10-11T19:18:41Z")
Few Nobel laureates are in their 30s. For Medicine, Physics and Chemistry, their age averages in the high 50s. ---
**Author:** ![Lamar\_Mundane](https://avatars.discourse-cdn.com/v4/letter/l/85f322/32.png) [@Lamar\_Mundane](https://boards.straightdope.com/u/Lamar_Mundane)\ **Post date:** [October 11, 2016, 7:41pm UTC](https://boards.straightdope.com/t/olympics-winnings-exempted-from-taxation/768188/31 "2016-10-11T19:41:49Z")
> [@Dewey\_Finn](#): > > Few Nobel laureates are in their 30s. For Medicine, Physics and Chemistry, their age averages in the high 50s. Give me a break. Don’t play the SDMB pedant role. Nobel Prize winners don’t toil in Sarah Palin’s schools until they get a great idea at 48 and get that job at a major research institute. They’re rewarded for a lifetime of research and discovery. ---
**Author:** ![Fiveyearlurker](https://avatars.discourse-cdn.com/v4/letter/f/da6949/32.png) [@Fiveyearlurker](https://boards.straightdope.com/u/Fiveyearlurker)\ **Post date:** [October 11, 2016, 8:40pm UTC](https://boards.straightdope.com/t/olympics-winnings-exempted-from-taxation/768188/32 "2016-10-11T20:40:05Z")
> [@Lamar\_Mundane](#): > > Give me a break. Don’t play the SDMB pedant role. > > Nobel Prize winners don’t toil in Sarah Palin’s schools until they get a great idea at 48 and get that job at a major research institute. They’re rewarded for a lifetime of research and discovery. Yes. That’s exactly my point. You are comparing a 22 year old kayaker who has spent no time in any career to a 60 year old scientist who has spent decades in a career before eventually making some money by the time he reaches his mid 40s. When that 22 year old Nobel winning scientist was a 22 year old poor as hell PhD student and he won some pittance of a science prize, that prize money was taxed. That’s would be an apples to apples comparison. ---
**Author:** ![Telemark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/telemark/32/372_2.png) [@Telemark](https://boards.straightdope.com/u/Telemark)\ **Post date:** [October 11, 2016, 9:00pm UTC](https://boards.straightdope.com/t/olympics-winnings-exempted-from-taxation/768188/33 "2016-10-11T21:00:48Z")
> [@Lightray](#): > > I think the big problem of this tax break is that it’s only the _medal winners_ who get it. You can’t give tax breaks on earnings that the other athletes _didn’t_ get. They didn’t win medals, they didn’t get bonuses to pay taxes on. Training expenses can already be used as deductions on your taxes. > **[Olympic Medals And Prize Money Remain Taxable - For Now](https://www.forbes.com/sites/kellyphillipserb/2016/08/10/olympic-medals-and-prize-money-remain-taxable-for-now/)** > > As US athletes continue to rack up gold at the Olympics, they're also racking up a tax bill. There's a proposal in Congress to exempt Olympic winnings, including medals, from tax - but is it a good idea? > [@](#): > > All of that said, the chances are that many of the U.S. athletes who medal this summer will not pay any tax on their medals and bonuses. Here’s why: if an athlete treats participation in their sport as a business, related business expenses are deductible on a federal income tax return. Those deductions, so long as they meet the “ordinary and necessary” criteria that apply to all taxpayers, would be offset by income – including the value of prizes. So all of those training expenses? Travel? Coaches? Equipment? Deductions against income. And if those deductions exceed related income – which is likely the case for many Olympic athletes – the excess can be carried forward or backward. > > If an athlete doesn’t treat participation in their sport as a business, but rather as a hobby, deductions are still allowed – but only to the extent that there is income to offset those winnings and only if a taxpayer itemizes. If that’s the case, deductions are treated as “miscellaneous itemized deductions” on Schedule A and are limited to the total of deductions in excess of 2% of AGI (adjusted gross income). With a hobby, any excess deductions cannot be carried forward or backward to other years. ---
**Author:** ![Hari\_Seldon](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hari_seldon/32/5173_2.png) [@Hari\_Seldon](https://boards.straightdope.com/u/Hari_Seldon)\ **Post date:** [October 11, 2016, 9:11pm UTC](https://boards.straightdope.com/t/olympics-winnings-exempted-from-taxation/768188/34 "2016-10-11T21:11:18Z")
> [@Fiveyearlurker](#): > > Can you explain how this analogy fits? I’m not seeing it. We complainers are playing the role of the second lobster. I think this is ridiculous. You compete for an olympic medal. How is it not income? You don’t compete for either a Nobel or a Pulitzer prize and they are logically just gifts from the awards committees and gifts are not taxable to the recipient. I don’t think they are taxed in Canada (but then neither are lottery winnings). ---
**Author:** ![Driver8](https://avatars.discourse-cdn.com/v4/letter/d/b5a626/32.png) [@Driver8](https://boards.straightdope.com/u/Driver8)\ **Post date:** [October 11, 2016, 11:47pm UTC](https://boards.straightdope.com/t/olympics-winnings-exempted-from-taxation/768188/35 "2016-10-11T23:47:54Z")
I’ll add to the “this is ridiculous” chorus. What problem is this exception trying to solve exactly? Are highly competitive athletes really forgoing the Olympics because they might pay some tax on the prize? I doubt that very much. Even if you were trying to claim that taking time off from work to practice and compete in the games is too onerous that would imply something like a tax credit for competitors as a whole, not for the small percentage that medal. But even that is silly. This solves no problems, and adds complexity to an already complex tax code for no good reason. It is an obvious example of catering to the lowest common denominator (the voter that is supposedly impressed by this, not the Olympic athlete). ---
**Author:** ![dracoi](https://avatars.discourse-cdn.com/v4/letter/d/90db22/32.png) [@dracoi](https://boards.straightdope.com/u/dracoi)\ **Post date:** [October 11, 2016, 11:55pm UTC](https://boards.straightdope.com/t/olympics-winnings-exempted-from-taxation/768188/36 "2016-10-11T23:55:25Z")
> [@Driver8](#): > > I’ll add to the “this is ridiculous” chorus. What problem is this exception trying to solve exactly? Are highly competitive athletes really forgoing the Olympics because they might pay some tax on the prize? I doubt that very much. Even if you were trying to claim that taking time off from work to practice and compete in the games is too onerous that would imply something like a tax credit for competitors as a whole, not for the small percentage that medal. But even that is silly. > > This solves no problems, and adds complexity to an already complex tax code for no good reason. It is an obvious example of catering to the lowest common denominator (the voter that is supposedly impressed by this, not the Olympic athlete). People who support this kind of thing are more concerned about the athletes on the low end, actually. Tax was due based on the value of the metals in the medals as well as on the cash prize. The result was that the cash prize might eaten up by tax on the medal and some people could actually wind up owing more. As I said, I sympathize with the idea behind the issue, but the fix is to increase the compensation Olympic athletes receive, not to carve out a new exemption in an already bloated tax code. ---
**Author:** ![Driver8](https://avatars.discourse-cdn.com/v4/letter/d/b5a626/32.png) [@Driver8](https://boards.straightdope.com/u/Driver8)\ **Post date:** [October 11, 2016, 11:58pm UTC](https://boards.straightdope.com/t/olympics-winnings-exempted-from-taxation/768188/37 "2016-10-11T23:58:27Z")
> [@dracoi](#): > > People who support this kind of thing are more concerned about the athletes on the low end, actually. Tax was due based on the value of the metals in the medals as well as on the cash prize. The result was that the cash prize might eaten up by tax on the medal and some people could actually wind up owing more. > > As I said, I sympathize with the idea behind the issue, but the fix is to increase the compensation Olympic athletes receive, not to carve out a new exemption in an already bloated tax code. Ah, I didn’t think about the tax on the medals itself. That makes this less ridiculous in my mind, but I agree with your preferred solution. ---
**Author:** ![running\_coach](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/running_coach/32/15836_2.png) [@running\_coach](https://boards.straightdope.com/u/running_coach)\ **Post date:** [October 12, 2016, 12:23am UTC](https://boards.straightdope.com/t/olympics-winnings-exempted-from-taxation/768188/38 "2016-10-12T00:23:12Z")
> [@Driver8](#): > > Ah, I didn’t think about the tax on the medals itself. That makes this less ridiculous in my mind, but I agree with your preferred solution. The Gold is only worth a few hundred. It’s gold-plated silver. ---
**Author:** ![Manlob](https://avatars.discourse-cdn.com/v4/letter/m/96bed5/32.png) [@Manlob](https://boards.straightdope.com/u/Manlob)\ **Post date:** [October 12, 2016, 12:46am UTC](https://boards.straightdope.com/t/olympics-winnings-exempted-from-taxation/768188/39 "2016-10-12T00:46:26Z")
I agree with dracoi. The prize comes from some government regulation. If they want more to go to athletes, especially those with low income, just raise the prize instead of complicating the tax code with more exceptions. There is already a mechanism in the tax laws to give lower income a greater share of earned income. This policy might hurt low income athletes anyway. By not counting the prize as earned income, low income athletes could miss out on the earned income tax credit and end up worse off as a result of this rule. ---
**Author:** ![UDS](https://avatars.discourse-cdn.com/v4/letter/u/ecae2f/32.png) [@UDS](https://boards.straightdope.com/u/UDS)\ **Post date:** [October 12, 2016, 12:49am UTC](https://boards.straightdope.com/t/olympics-winnings-exempted-from-taxation/768188/40 "2016-10-12T00:49:58Z")
If the tax on the intrinsic value of the medal is a problem that needs to be addressed (and I seriously doubt that it is) then the appropriate response is to exempt the intrinsic value of the medal from tax. It’s not rocket science, people. [Previous page](https://boards.straightdope.com/t/olympics-winnings-exempted-from-taxation/768188.md?page=1) [Next page](https://boards.straightdope.com/t/olympics-winnings-exempted-from-taxation/768188.md?page=3)