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Pepperdine University School of Law

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Friday, July 13, 2012

Holy Taxation, Batman! H&R Block Messes Up Bruce Wayne's Taxes

Kay Bell notes that H&R Block's flashy campaign -- Superhero Economics: Bruce Wayne (Batman) v. Peter Parker (Spiderman) -- wrongly asserts that Batman would not be liable for any federal income tax on his $143 million income because of his $279 million of charitable giving:

Batman Spiderman

Section 170(b)(1)(A) limits the charitable deduction to 50% of the taxpayer's adjusted gross income. So Batman would be taxable on roughly $72 million, leaving over $200 million of the charitable contribution deduction to be carried over to future years.

 

Update:  H&R Block has corrected its mistake:

Batman

http://taxprof.typepad.com/taxprof_blog/2012/07/hr-block-.html

Celebrity Tax Lore, Tax | Permalink

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» Holy amended tax infographic, Batman! from Don't Mess With Taxes
Ka-pow! Bam! Amend! Taxes pretty much pummeled H&R Block's superhero economics infographic last week. I noticed that the Dark Knight's alter ego Bruce Wayne improperly deducted all his charitable contributions. Janet Novack, Forbes' Washington, D.C., b... [Read More]

Tracked on Jul 17, 2012 6:43:43 AM

Comments

But he could probably deduct (depreciate?) the Batman suit because he wears it only for specific work functions. So could the Catwoman, who apparently could not even go to the bathroom in the famous black outfit. However, she could face an issue for engaging in illegal activity.

Posted by: michael livingston | Jul 14, 2012 3:04:14 AM

Batman is cool. He knows H&R Block fees and penalties guarantee will kick in right? Riiiiigggghthhttt :)

Posted by: john mcginnis | Jul 14, 2012 5:31:27 AM

Dear Professor Caron: Wayne might be in even more trouble. Isn't the limitation on charitable giving 30% of AGI if property, as opposed to cash, is given? Given the scale of Wayne's giving, property donations seem likely.

Sincerely yours,
Gregory Koster

Posted by: Gregory Koster | Jul 14, 2012 6:58:13 AM

How does the Alternative Minimum Tax affect these calculations?

Posted by: luagha | Jul 14, 2012 8:14:49 AM

The numbers for Parker also seem off.

Peter Parker is a free-lance photographer, so he has to pay SE taxes which H&R Block ignores. This might be off-set because he should deduct business expenses, which is also missed by H&R and not availible to Wayne who only does crimefighting as a hobby. He should also be able to deduct at least some of his super-hero expenses, if he didn't travel across the city by web to be at the scene of crimes he would not be a position to get the photos he sells to the Daily Bugle (and certainly not the ones of Spiderman saving the day), I'm not certain how combined hobby/work expenses are treated these days but at least a pro-rated portion should be deductible.

Posted by: max | Jul 14, 2012 9:38:33 AM

He can't deduct/depreciate the Batman costume or gear, because he's not employed as Batman - just as an amateur Civil War reenactor gets no tax advantage for the uniform or gear.

By the same token, I don't think EITHER Batman or Spiderman can deduct the training/education listed above, as it's not ongoing training or education required for a job or profession in which they are currently engaged. Though Parker could presumably deduct the interest portion of his student loan payments. (And while H&R Block doesn't show a deduction for these items, why else are they listed?)

Posted by: Shelby | Jul 14, 2012 10:28:09 AM

This is not encouraging. I think I'll stick to TurboTax. At least then the mistakes are my own.

Posted by: wagnert in atlanta | Jul 14, 2012 4:17:00 PM

They both would have received refunds if they had used Turbo-Tax/LIBOR Edition.

Posted by: AD-RtR/OS! | Jul 14, 2012 6:42:48 PM

Unfortunately neither batman nor spiderman can deduct any of their equipment or training, because they would have to give up their secret identity to the IRS. Now as far as the IRS is concerned, anything spent on the batcave might as well have been spent on wine women and song.

Posted by: richard40 | Jul 16, 2012 11:38:37 AM