So an athlete is given the bronze medal at the Olympics then comes home and has to shell out $3,500 to the taxman?

Abhorrent!

The US has never won a medal in the Winter Olympic event the biathlon, however I think the IRS would be reluctant to tax them if they did.

I think it is a disgrace for the IRS to tax them. Just like the NCAA shouldn't require a medal winner to decline the token prize money if they are in college. Frankly, the IRS should be responsible for assisting in the archery competition every four years if nothing else.

We fought a war with England one time over excessive taxation. It was called the Revolution. It seems like it is time to do it again. OR WE CAN JUST STOP ELECTING DEMOCRATS AND REPUBLICANS. Let the people choose wisely.

This is their profession...the medals and prize money is their income...I don't see the problem.

These athletes don't just sit around and do nothing for 4 years..they compete and win money as income for their performance.


I'm failing to see why they should be exempt from taxes.

Maybe some creative CPA can figure out a way for them to itemize and deduct the value of their training time (plus ancillary costs) to counter the tax liability of the honorarium and medal (altho the actual metallic value of the medals are de minimis).

So do you have to pay the IRS if you win an Oscar?

Originally posted by AndyMayhew
So do you have to pay the IRS if you win an Oscar?

Based on the current value of gold, the statue is worth about $500.00. With a net worth of more than 14 million dollars, Colin Firth, last year's best actor winner, can probably afford the max tax on that of $175. Except he doesn't have to pay the IRS a penny - he's English.

This is garbage. The money simply counts as income. Training expenses are far above the money they earn so there will be no taxes due on these amounts alone. Add in sponsorship deals,appearances, etc. however, and the top athletes will likely make some decent money that ends up being taxable. I would bet not more than one or two will end up paying a 35% rate on this additional income. In fact, no one ever pays a full 35% rate as the first $100,000+ is taxed at much lower rates. Thus only incremental income would be taxed at those rates.

I bet to a man and woman all Olympians would be happy to pay 100% tax if it meant they won a medal.

Is the money they get from "sales?" From "services offered?" From "winning" like the lottery? What exactly in the effort constitutes "income" that is taxable per running in a race?

If somehow this is "income" from some service they offer - running in a race, then it would seem to me that ALL the expenses incurred to get to the race are a business expense - that is if a person running in a race is a business. If they loose, it would seem to be the same. If running in a race is a business, then all expenses, which for a runner can be everything from food to socks, then all is fair game.

Problem for me is I can't see how anything they do is a business as they don't sell anything, they aren't "paid" anything to appear, they are not a service, and in the end there is no real transaction. In fact, they are more like a charity case then professional business.

As for the medal, this makes no sense at all. While I can see a tariff on bringing the medal into the country per weight, I don't see how the IRS is involved here. If the trophy in question is income, then every single child who gets a medal for reading, raising money for their school or winning their league championship in little league is a scofflaw and should be arrested.

To clear up a little something here, a Prize is an unexpected windfall and the tax rates are much higher. Just like you pay a different tax rate on a Christmas Bonus check. In fact, the rate you pay on a bonus check is equal to that as if it was a weekly income and the company does not pay half of your share like they do with your regular wages. Plus the employer is able to deduct the full amount of that bonus check as legitimate business expense.

For the Olympian, that Prize money is going to be taxed the full amount of 35%.

Originally posted by Ahabstar


For the Olympian, that Prize money is going to be taxed the full amount of 35%.

,
You may be a really great forum moderator, but you're a really crappy tax lawyer. There is no different rate for prizes. It is included in gross income, just like wages, salaries, commisions, alimony recieved lottery winnings, etc. If you're too lazy to look up the tax code citation, I can give it to you. Hint...... it's in Title 26 of the United States Code. Should you really be spreading false information?