Win the gold...lose the green

Was just watching "The Daily Buzz", and yeah, it's a poor source of "news", but I guess I'm behind the curve when it comes to the Olympics....WAAAAAAY behind the curve.

They reported that there is a tax penalty to be paid when our athletes win a medal. The amount of the tax penalty varies with the medal with gold the biggest/most expensive and bronze the least.

Just the medal itself is taxed as INCOME and the gold can cost an athlete nearly $900 in income tax liability. The $25,000 prize that is awarded (I didn't know about this) is also considered to be taxable income, so that a FURTHER $8000.00+ liability is incurred.

The British government is allowing it's athletes to keep the total $25,000 if they win the gold. The "reporters" didn't say what other countries are doing about this added "income".

They addressed the idea that many athletes are now professionals, so that the tax problem is no big deal. Unfortunately, there are still some NON-professional athletes also competing, athletes trying to maintain an NCAA standing.

that is the way it is with any "windfall" At least the prize money shuld cover the taxes?

Well, I'm no tax attorney but, it seems to me the medals are trophies. Are trophies generally taxed in other sports?(world series rings ect.). Not that I've heard of. The prize money OTOH, is income.

Are Superbowl Rings trophies or jewelry? I bet they get insured like they are jewelry!

I head taxes on the medal are like a few bucks. Its all total bullE36 M3 though. They shouldn't have to pay a dime.

HappyAndy wrote: Well, I'm no tax attorney but, it seems to me the medals are trophies. Are trophies generally taxed in other sports?(world series rings ect.). Not that I've heard of. The prize money OTOH, is income.

They are made of solid gold if I understand correctly. If you allow tax exemptions for all trophies then CEOs will be getting paid with "trophies" of uncut diamonds for their great work every month starting tomorrow.

I doubt solid gold, but I don't know either. Solid gold is super weak. Solid 24k gold, I would believe.

The "Gold Medals" aren't anything like 24k gold. IIRC they're over 90% silver and have approx 2% gold content with some bronze or copper thrown in. How they are supposed to create a $900 tax liability when the metal is worth something like $500-$600 seems a little dubious to me.

http://www.investopedia.com/financial-edge/0712/True-Value-Of-An-Olympic-Medal.aspx#axzz22Obr9Zsj

Hmmm.. Interesting. Good info, box.

I just heard on the news the make up of the gold medals and they have an extremely low gold content. Most of the shine comes from copper. And there's a lot more silver in the medal than gold.

Apparently they are already pushing a bill to not tax them.

I think this whole story is really a non-issue. People are getting worked up because they don't understand all of the facts.

The value of a gold medal is $650 and they contain very little real gold. The tax liability for a gold medal is fairly minor at $236, and even less for silver and bronze medals.

The US government gives each medal winning athlete a cash award ranging from $25K for gold, $15K for silver, and $10K for bronze. Since this cash award is considered income athletes have to pay taxes against it. When you think about it this situation is really no different then paying taxes on a bonus a company gives its employees.

You 'earn' money you pay taxes against it. End of story.

In reply to Quasimo1:

hey mister logic, there's no place for you on this here interwebz.

I was amazed when I found that Olympic gold medals aren’t solid, just a very thin plating. You’d think that with the millions and millions in sponsorship and payments to the IOC they could at least cough up for the real thing these days.

Cool story about a gold medal. My kids both attend(ed) a Waldorf school, and in 5th grade they study Ancient Greece and take part in a Pentathlon with other schools where the kids are randomly assigned to Classical Greek city state. At the host school the sister of one of the teachers is a 4 time Olympian and a gold medal winner. She comes and gives a great talk to the kids at the beginning of the event and passes her gold medal around. She’s passed it around to so many hundreds of kids (and dads ) that the 6grms of gold is rapidly wearing off In the center and you can clearly see the silver underneath. I think it’s cool she’s willing to let this happen so the kids can see and feel a piece of Olympic history.

Ahhh. I was expecting Phelps content.

HappyAndy wrote: The prize money OTOH, is income.

While I don't disagree, the years of training involved would make it a net loss.

Knurled wrote:

HappyAndy wrote: The prize money OTOH, is income.

While I don't disagree, the years of training involved would make it a net loss.

By the time your at this leval isn't the US Olympic team picking up the tab for your training and travel? That and your sponsors

poopshovel wrote: Ahhh. I was expecting Phelps content.

Me too.

Knurled wrote:

HappyAndy wrote: The prize money OTOH, is income.

While I don't disagree, the years of training involved would make it a net loss.

That's like saying that E36 M3ty temp job you took after college is a net loss because of how expensive school was. It's not like that's the last of the money they're ever going to get from all their training.

Here's the article breaking down the IRSs take for the medals and prize money.

http://www.weeklystandard.com/blogs/go-gold-pay-irs_649187.html

What will problem happen in Ms. Franklins case is that she'll turn down the prize money to maintain her NCAA standing. There was a blurb on her saying she and her parents turned down corporate sponsorships with the implication that the full ride to college would be much more valuable than the couple 10's of thousands that the sponsors were offering.

Quasimo1,

as I said, my "source" for info was VERY weak. I didn't know the athletes were given ANY prize money, much less where it came from. From listening to the story on tv, I ASSumed it was awarded by the IOC, and ALL medal winners got cash. Apparently, that is not the case? If you come from a country like, say, North Korea...you are given a free meal? Which, in North Korea could almost be worth the equivalent of $10,000.

integraguy wrote: If you come from a country like, say, North Korea...you are given a free meal? Which, in North Korea could almost be worth the equivalent of $10,000.

EL OH berkeleyING EL......and sad, but true

In reply to integraguy:

Cash prizes come from individual countries and not the IOC, so it is possible for some athletes to take home only a medal for their efforts.

Of course if you are a North Korean athlete your motivation may not be focused on winning but instead on not loosing to a South Korean. I read an article that told the story of how some athletes who failed to win medals or lost to a South Korean athlete were sent to prison camps or forced to work in coal mines as punishment.

N Sperlo wrote: I doubt solid gold, but I don't know either. Solid gold is super weak. Solid 24k gold, I would believe.

???????

I've been wrong before ...

but to the best of my knowledge 24k gold is "pure" gold ... so what's the dif between solid gold ( super weak ) and solid 24k gold ....?

wbjones wrote:

N Sperlo wrote: I doubt solid gold, but I don't know either. Solid gold is super weak. Solid 24k gold, I would believe.

??????? I've been wrong before ... but to the best of my knowledge 24k gold is "pure" gold ... so what's the dif between solid gold ( super weak ) and solid 24k gold ....?

No clue, but I think 24k isn't pure. Very rarely is anything made from PURE gold, buy hey, what do I know about gold? I don't own any. My wedding ring is tungsten.