Tuesday, December 13, 2011
Forbes: By Declining $10,000 Bet, Rick Perry Spared Mitt Romney a $4,000 Tax Bill, by Janet Novack:
By now, you’ve probably seen the video of Mitt Romney offering a $10,000 bet to Ricky Perry at Saturday night’s Republican Presidential debate and thought about the political ramifications. But what of the tax implications? ...
What if Rick Perry had foolishly taken Mitt Romney up on his $10,000 bet offer? According to PolitiFact, Romney would have won the bet, since Perry’s claim that the first edition of Romney’s book endorsed a Massachusetts individual health care mandate as a model for the nation is “mostly false.”
And in that case, if Perry had acknowledged the loss and handed over $10,000—ok, maybe that’s a heroic assumption–the cash would have been taxable to Romney as ordinary income at a 35% federal and 5.3% Massachusetts state rate. Hence Perry spared Romney a $4,000 tax bill.