Taxing Gold (Medals)

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Not only do the winning athletes at the Olympic games take home a medal, they also take home a decent paycheck. The gold medal itself is valued at approximately $650, and the athlete gets a check for $25,000. For silver, the medal is worth $330, and comes with a $15,000 check. The bronze medal is worth a mere $5, but comes with a $10,000 prize. As of the time I am writing this post, that totals $1,610,000 in prize money for US athletes. (39 gold, 25 silver, 29 bronze).

The issue here is that both the medal and the cash are taxed for the athletes. The IRS's theory: this is no different than winning the lottery, its income. Senator Rubio's theory (who introduced the bill): the athletes are being punished for their accomplishments at the Olympics by taxing their excellence. The proposed Olympic Tax Elimination Act would exclude the value of any prize or award won in athletic competition at the Olympic Games from gross income.

I am yet to hear anyone distinguish between taxing the value of the medal and taxing the actual money received. I can see the argument that the medals received, regardless of what it is made of is more of a "trophy" than income. I was surprised to hear the athletes are taxed on the value of the medal. I highly doubt any athlete intends to sell their medal for the cash. (Though I did find a 1952 Olympic Gold Medal from the games in Finland for sale, starting bid almost $5,000, in case anyone is interested.) The cash on the other hand, right or wrong, I at least can see why they are taxed on that. But should they be taxed?

Only time will tell which side of the policy debate will win this battle.

Published In: Art, Entertainment & Sports Updates, Tax Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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