And the Award Goes to the IRS!
Each year at the Oscars, celebrities receive “swag bags” for attending the event. Last year’s swag bag had around 56 items and cost upwards of $100,000. But, did you know these “gifts” can be taxed as income?
According to Forbes, companies pay a fee to have their gear included in the gift bags for celebrities. However, the recipients must report it as income, and the tax bill can be considerable.
What if celebs don’t want the gifts? While some celebs regift the bags or turn them down, they can also opt to take a charitable contribution deduction if they donate the gift bag to a qualified charity. Just like gifts, it’s not uncommon for celebrities to make money simply by wearing certain gowns, jewels and accessories for big awards shows. In fact, some are reported to receive up to $250,000 to wear a dress on the red carpet. But, not surprisingly, if a celebrity is paid to wear a dress to an event, the IRS gets a piece of the pie.