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Sunday, January 30, 2005

Taxation of Complimentary Tickets

Nba_2The NBA and teams are now withholding income tax on the value of the complimentary tickets received by referees and players -- about 10k of tax withheld on 25k worth of free tickets:

Players say they are angry that about $10,000 will be withheld from their paychecks for what is supposed to be a fringe benefit. "It's bull****," Kings forward Chris Webber, 31, said. Responding to corporate scandals involving such companies as Enron Corp. and WorldCom Inc., the U.S. Internal Revenue Service is scrutinizing non-cash compensation such as homes and cars or - in the case of professional athletes - extras like free tickets.

See media reports here and here

 

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Comments

The U. of Michigan, like many schools, provided complimentary tickets to members of the Board in control of Intercollegiate Athletics for certain away football and basketball games. Quite some years ago, the university concluded that the vlue of those tickets is taxable income to the recipients, and the University accordingly reported the income. Some members of the Board were irate, although the University's decision seems clearly to be correct. No one likes being taxed on something they used to receive tax-free.

Posted by: Douglas Kahn | Jan 30, 2005 3:24:23 PM