$ Mountain Biz
By: Larry Stone, CPA, CTC
Larry Stone is a certified public account (CPA) and Certified Tax Coach (CTC) tax professional, Larry has specialized training and experience in strategically reducing taxes and saving his clients their hard earned cash.
The Thrill of Victory, The Agony of Taxes
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We all look forward to watching our star athletes compete in next year’s 2014 Winter Olympics, officially the XXII Olympic Winter Games, at Sochi, Russia. As our Team USA athletes compete in Biathlon, Bobsled, Curling, Figure Skating, Ice Hockey, Luge, Skeleton, Skiing, Snowboarding and Speed Skating, we will root for each one to succeed and bring home a medal. We all enjoy watching the victors celebrating on the winners’ podium and sharing in their achievements. For many of our athletes, their Olympic accomplishment is the pinnacle of their career, and we admire their success. While we’re watching to celebrate with our star athlete’s success, the IRS is watching, too! That’s because, under our current tax code, our athletes’ efforts are taxed on both the value of the Olympic medal and the bonus prize money received.
Athletes view their medals as the priceless result of years of hard work. They don’t look at them and think “metal,” they think “medal”! But there is a value to those medals, which fluctuates with the market value of the metals they’re made of. According to CNN Money, July 18, 2012, the medals from the 2012 London games were valued at $650 for gold, $335 for silver and $5 for bronze. In addition to the value of the medals they receive, the United States Olympic Committee awards cash bonuses for each medal won of $25,000 for the gold, $15,000 for the silver and $10,000 for the bronze. Assuming that our athletes are in the highest 39.6% federal ordinary income tax rate (which isn’t hard to achieve through