News about this year’s Oscars continues to get worse for the Hollywood self-gratification festival. Following poor ratings and abysmal reactions from fans on the internet, the only thing Hollywood stars had left to hang on to was a wowing goodie bag given to attendees of the event. “Given,” however, might not be the right word.
According to Forbes, this year’s goodie bag totaled a whopping $126,000, meaning that attendees who received a bag will have to pay Uncle Sam a cut of the value of all those goods. Forbes says that since this counts as income, stars may be out more than $60,000 in state and federal taxes on their newly received income.
The bag comes with many luxuries, from vacations to colognes, and is one of the most extravagant party gifts in existence. Each year, outlets report on the contents of the Oscars’ goodie bags. This time, Breitbart offered a glimpse into what the stars would be receiving:
“This year’s bag was reportedly stocked with $126,000 worth of freebies to Oscars attendees. The gifts inside included a $40,000 Canadian getaway, a $400 bottle of “gender neutral” perfume, a $435 box of sweet dates, a $12,00 voucher for “body sculpting,” and much more among its more than 60 gifts.”
While not everyone will take home the coveted Oscar statuette, all of the top acting and directing nominees and the host will receive a gift bag full of swag. https://t.co/3L7TTQmVbq
— NBC Bay Area (@nbcbayarea) March 13, 2023
All of these gifts are seen in the Tweet above, spanning the length of a table. The swag bag is offered to everyone nominated for an award, but some people may not want to accept the gift due to the heavy tax penalty associated with the value. Forbes also wrote about the value that these gift bags bring to companies who place their product or service inside. The potential for a star to use the objects in the back on camera or to talk about them in an interview entices companies to play along with this extravagant party favor. Forbes wrote this, explaining why the recipient is taxed on the value of the gift:
“Some celebs turn down gifts, and one reason is taxes, the celebs have to report the value of what they receive as income, and the taxes can be big. How can ‘gifts’ be taxed as income? The answer is when they are not really gifts. Top federal taxes are 37%, although they might go up, and then there is California tax topping out at 13.3%.
“For many, the total tops 50%, and state taxes are painful, since you can only deduct $10,000 in state taxes. Back in 2006, the Academy stopped officially giving out gifts due to IRS scrutiny, so the gifts now are not formally part of the Academy. For years, the entertainment industry and the IRS locked horns over the tax treatment of these “gifts.” Eventually, the tax disputes were settled, with swag being clearly taxable, and celebs getting IRS Forms 1099.”
So, if an individual wants to accept their goodie bag after being nominated, it is essential to understand that nothing about the “swag bag” is free. Uncle Sam always gets his cut, and this case is no different. Even the biggest stars in Hollywood can’t seem to avoid the IRS.
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