Paul L. Caron
Dean



Sunday, April 23, 2006

IRS on Tax Consequences of Extreme Makeover: Home Edition Reality TV Show

Irs_logo_240 We have extensively blogged the proper tax treatment of payments received by taxpayers who participate in ABC's Extreme Makeover: Home Edition reality TV show (links below).  The IRS recently released Information Letter 2006-0012, in response to a request from Congresswoman Marsha Blackburn (R-TN):

The producers . . . pay applicants $50,000 to rent their homes for 10 days. The producers advise the applicants that the home improvements are non-taxable under § 280A(g).  The constituent asked that the Congress close this loophole and that the IRS ensure taxes are paid on income won on reality TV shows.

Due to disclosure and privacy laws, I cannot provide specific tax or taxpayer information on a taxpayer's case to anyone other than the taxpayer or the taxpayer's authorized representative. However, I can provide general information, which I hope is helpful....

To the extent that the value of the improvements constitutes a prize or an award, however, it cannot also be considered rent, and therefore could not qualify for the exclusion from gross income under § 280A(g).

https://taxprof.typepad.com/taxprof_blog/2006/04/irs_on_tax_cons.html

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