Should Olympic medals be subject to tax?

[Llama_Llogophile]

Saw this on a friends Facebook page:

Go for the Gold! (Pay the IRS)

And here’s a another opinion on the issue

Basically, if you win an Olympic medal you get a monetary award: $25k for a gold, $15k for silver and $10k for bronze. That’s apparently taxable income in the United States. It seems some feel it shouldn’t be. I don’t have a fully formed opinion on this yet, but I’m leaning toward, “Fine, tax the medals, I don’t really care.” Olympic athletes do put in a lot of work and make sacrifices for their sport, but I’m not sure this is sufficient reason to get out of paying taxes on their winnings.

[Simplicio]

I put a lot of work and make sacrifices to do my job, but I still have to pay taxes on my remuneration. I don’t see why Olympians should be any different.

Plus I like the quote form Rubio in the second article. He complains about how complicated the tax code is, and then immediately suggests…adding another special case exemption to the tax code.

[running_coach]

I have never heard of a payment accompanying a medal. Sounds false to me.

ETA: I was wrong.

Snopes

[Simplicio]

@runner pat

I have never heard of a payment accompanying a medal. Sounds false to me.

ETA: I was wrong.

Snopes

The money comes from the USOC, not the Olympics itself.

(Which makes the Weekly Standard article misleading, since they say athletes from other countries don’t have to pay taxes on their prizes since their countries don’t asses tax on foreign income, but other athletes don’t get cash prizes from the US OC.

Its also misleading because it makes it sound like this is some special tax on Olympic prizes, but its just the usual tax on prizes in general.

Its also misleading because the numbers given assume the Olympians are in the top tax bracket. I don’t know what the average income of someone in the Olympics is, but I doubt your average discus thrower is pulling in 250k a year.

Do people really pay to read the Weekly Standard?)

[GIGObuster]

Snopes marks it partly true, Politifacts marks it Mostly False.

PolitiFact - Do Olympic medalists owe up to $9,000 to the IRS?

We will also note that ATR said “winners will owe up to $9,000” – a phrase that gives the group leeway for its estimates.

Still, the experts we spoke to suggested that a $9,000 tax payment was unrealistically high. For most athletes, the payment will be less, and possibly quite a bit less. Here’s why:

Business expenses

An athlete who wins a medal bonus would be free to deduct any unreimbursed expenses from the bonus, lowering – or maybe even eliminating – their tax hit. In fact, accountants say an athlete would be crazy not to.

“Anything used for the production of income is deductible,” said Brad Bell, a partner with BGBC Partners LLP in Indianapolis who specializes in accounting for athletes.

Greg Shafer, an accountant in Colorado Springs, Colo., added that “if they were my client and had to pay that kind of tax, I would say, ‘Well, what are your ordinary and necessary expenses?’ That could be travel, uniforms, cell phone use.” The U.S. Olympic Committee is based in Colorado Springs, and Shafer said he has provided accounting services to athletes.

So expenses for gymnasts might include tumbling classes, payments to coaches and travel costs to international meets. Cyclists would pay for new bikes and maintenance. An Olympian fencer told Forbes.com that her expenses for equipment and competitions run around $20,000 per year.

[TriPolar]

It should be treated as income, because it is. They can deduct the business expenses just like any other. I assume there’s already some exception to cover the value of the medals.

[Whack-a-Mole]

@TriPolar

It should be treated as income, because it is. They can deduct the business expenses just like any other. I assume there’s already some exception to cover the value of the medals.

^^ This.

You get an income. You pay taxes on that income. The government does not give a hoot about how you earned the income in general (illegal sources would be a problem).

Seems pretty normal and straightforward to me.

If the government wanted to give its athletes a break it can easily pass a law that exempts Olympic money earned from from being taxed.

[the_diego]

It depends. Several countries zero-rate earnings made abroad. So that’s a disadvantage to the host country’s athletes.

[Whack-a-Mole]

@the_diego

It depends. Several countries zero-rate earnings made abroad. So that’s a disadvantage to the host country’s athletes.

Not sure what “zero rate” means but Americans think it is an Olympic rule that athletes be non-professional/amateurs (i.e. not their job, not paid).

That is an American rule and not sure how much a rule it is anymore (thinking basketball).

If other countries want to pay their athletes a gazillion dollars there is no rule against it.

If those countries want to tax their athlete’s earnings again that is up to them.

[Jas09]

Yeah, I don’t really get this. Don’t Nobel Prize winners pay taxes on that as well? International sports stars?

It’s income - why shouldn’t it be treated the same as all other income earned abroad?

[Ravenman]

For those who think that Olympians should not be subject to the income tax for these winnings, do you believe that the Super Bowl champions should also be exempt? I see here that players tend to get a post-season bonus in the $150,000-$170,000 range, not to mention the ring.

And I reiterate the question about Nobel Prize winners being taxed – I seem to recall that some people were chagrined that Obama could donate all of his prize money to charity and not pay any taxes on it. Should Nobel Prize winnings be taxed or not?

[TriPolar]

@Whack-a-Mole

^^ This.

You get an income. You pay taxes on that income. The government does not give a hoot about how you earned the income in general (illegal sources would be a problem).

Seems pretty normal and straightforward to me.

If the government wanted to give its athletes a break it can easily pass a law that exempts Olympic money earned from from being taxed.

Except I heard on the news this morning that they are taxed on the value of the medals. Maybe that was some airhead screwing up the facts though. I wonder if military medals and the like are taxed like that, or if it’s true. Either way, I think Olympic medal winners would usually have offsetting expenses, or in many cases now-a-days they’re already making plenty of money so they could afford it.

[running_coach]

@TriPolar

Except I heard on the news this morning that they are taxed on the value of the medals. Maybe that was some airhead screwing up the facts though. I wonder if military medals and the like are taxed like that, or if it’s true. Either way, I think Olympic medal winners would usually have offsetting expenses, or in many cases now-a-days they’re already making plenty of money so they could afford it.

Wouldn’t be much, the gold is only worth $644 metal value. It’s almost all silver with 6 grams of gold plating.

[TriPolar]

@runner pat

Wouldn’t be much, the gold is only worth $644 metal value. It’s almost all silver with 6 grams of gold plating.

Cheap bastards.

[Really_Not_All_That_Bright]

@Ravenman

For those who think that Olympians should not be subject to the income tax for these winnings, do you believe that the Super Bowl champions should also be exempt?

This. If Tiger Woods had won the Open I don’t think anyone would be demanding that his $1.5 million prize be tax-exempt.

[running_coach]

@TriPolar

Cheap bastards.

It would get real expensive real fast if it was solid gold.

Olympic Medals

Shape: Usually circular, featuring an attachment for a chain or ribbon
Diameter: A minimum of 60 mm
Thickness: A minimum of 3 mm
Material:

First place: It is composed of 550 grams of silver (at least 925 grade) covered with 6 grams of pure gold (worth approximately $800 as of July 29,2012).
Second place: It has the same composition as the first place medal without the gilding (worth approximately $500 as of July 29, 2012). [9]
Third place: It is mostly copper with some tin and zinc (worth approximately $3).[10]

Just the 28 gold medals needed for mens track and field would be about $750,000 or more. Think of the cost and the security needed to cover all the medals for every event.

[TriPolar]

@runner pat

It would get real expensive real fast if it was solid gold.

Olympic Medals
Just the 28 gold medals needed for mens track and field would be about $750,000 or more. Think of the cost and the security needed to cover all the medals for every event.

It’s a drop in the bucket compared to the rest of the costs involved in the Olympics and the sponsorship and appearance deals some athletes make. Some of those athletes won’t ever make much money from their sport. Now the medal itself should be an honor no matter what it’s made from, so I’m not going to carry this point very far. I’d rather complain about humans winning medals in events where the horses are the athletes.

[running_coach]

@TriPolar

It’s a drop in the bucket compared to the rest of the costs involved in the Olympics and the sponsorship and appearance deals some athletes make. Some of those athletes won’t ever make much money from their sport. Now the medal itself should be an honor no matter what it’s made from, so I’m not going to carry this point very far.** I’d rather complain about humans winning medals in events where the horses are the athletes**.

I can agree with that. There have been a few riders in their 70s in the past.

[Fiddle_Peghead]

@runner pat

I have never heard of a payment accompanying a medal. Sounds false to me.

ETA: I was wrong.

Snopes

From this link, it seems Italy pays $182,000 for a gold medal, Russia pays $135,000, and Ukraine pays $100,000, while the US only pays $25,000. As a proud American, I say this CANNOT STAND!

USA! USA! USA!

[Shodan]

I doubt the US women’s gymnastics team is going to be hurting for money anytime soon, no matter how much the Russkis pay their girls.

Regards,
Shodan