Question

The Taxability of Oscars Gift Bags, is better to donate it before accepting it or not? how much tax you pay on the gift bag?

Answer 1

The Oscar Gift Bag , given to Osacr nominees (For the Academy awards)consists of a no.of itmes like luxurious and precious items of jewellery including diamonds,exqiuisite dresses,cosmetics & all-inclusive vacations in exotic & choiciest locales around the globe and much.much more.

All these , without any exception , are sponsored & even though the respective companies gives them free and then write-off in their books as cost, the IRS , taxes them as income at the hands of the recipient , at the sum fair value of all the gifts received.

The tax rate & amount depends on the tax -bracket of that particular individual.

If he/she is in the 25% tax bracket, she may have to pay 25%*100000(2018 Distinctive Assets" Oscar gift bag )= $ 25000

Or if he is in 33% tax-bracket, she will have to pay $ 33000 .

If it is donated or given for charity also, charitable contributions are allowed upto a maximum of 50% only & naturally the balance will be taxed at the hands of the recipient.

The only way-out of the situation is for the recipient to totally refuse to accept any gift bag.