Saturday, December 25, 2004
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.