December 25, 2004
Tax Issues in Jib Jab's Santa Claus Video
The folks at JibJab, who brought us the hilarious This Land! video of President Bush and Senator Kerry (blogged here), have a new Christmas video Santa Claus!. Participants in the Tax Prof Discussion Group have noted the many tax issues in the video:
Stuart Lazar (Thomas Cooley):
- Would cash gifts be includible in income? Clearly, the milk and cookies would be a de minimis gift. But, in the words of the immortal Jon Stewart, cash might be de maximus. Or it might be seen as the sale of the presents for the cash.
- Can Santa claim the elfs as dependents?
- Does the repossesion of Santa's workshop give rise to COD income? Or, does Santa fall under the insolvency exception?
- Can Santa deduct the costs of making children's presents against the income he earns from appearing at department stores? Can he show a loss or is he limited by Section 183? Do the passive loss rules come into play?
Jim Maule (Villanova):
- If no income and a gazillion dollars of expenses, does the section 183 hobby loss limitation apply?
- Are the milk and cookies taxable income?
- What about cash given in lieu thereof as requested?
- Is there a tax convention between the U.S. and the North Pole?
- Medical expense deduction for the physical?
- Tax consequences of the creditors' seizure of the sleigh and the factory foreclosure?
- What method of inventory accounting in use?
Gail Levin Richmond (Nova): Can Santa deduct his "uniform"?
Stuart Lazar (Thomas Cooley): I would guess that Santa probably wears his "uniform" year round -- it is a chick magnet. As such, it does not pass the Pevsner test.
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Santa isn't concerned about income taxes because he is a 501(c)3) tax exempt organization.
Posted by: steve karpa | Dec 27, 2004 8:54:36 AM
Well! conditions on which the taxes are based are never meant to be friendly. So what' the hush-hush?
Posted by: John | Sep 6, 2006 12:04:39 PM