Paul L. Caron
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Saturday, February 7, 2015

Malcolm Butler, Not Tom Brady, to Pay Income Tax on Super Bowl MVP Truck

BradyFollowing up on Thursday's post, The Tax Consequences of Tom Brady's Gift of His Super Bowl MVP Truck to Malcolm Butler:  ESPN, Malcolm Butler to Pay Taxes on Prize:

The truck that Chevrolet presented to New England Patriots quarterback Tom Brady as Super Bowl MVP will be given directly by the company to teammate Malcolm Butler instead.

Chevy spokesman Michael Albano said the truck, a loaded Colorado, will be given to the cornerback, who intercepted Russell Wilson's pass on the goal line to seal the Patriots' win in Super Bowl XLIX last Sunday. The event will take place in the Boston area Tuesday, Albano said.

If Brady received the truck himself and gave it to Butler, he would have to count its value -- which Albano said was worth roughly $35,000 -- as income and he would be taxed on it, said Robert Raiola, a CPA who specializes in sports tax management with O'Connor Davies in New Jersey. Brady also might have had to pay a gift tax. U.S. residents can give $5,430,000 worth of gifts in their lifetime before having to pay tax on what they give. It is not known how close Brady might be to that limit.

Now instead of Brady paying income taxes, Butler will have to, according to Raiola. The approximately $35,000 value will now count as income to Butler, and he will pay taxes on that.

Neil H. Buchanan (George Washington), Of Super Bowl Trucks and Gift Taxes: Even the Silliest Anti-Tax Arguments Can Remind Us of Some Useful Lessons

(Hat Tip:  Gregg Polsky.)

https://taxprof.typepad.com/taxprof_blog/2015/02/malcolm-brady-not-tom-brady-.html

Celebrity Tax Lore, Tax | Permalink

Comments

Seems like a scam to me. The income should be reported by Tom Brady. But then, what do I know, I don't follow NFL football.

Posted by: Tom Fituugen | Feb 8, 2015 4:17:40 AM

Is it just me or does this not pass the smell test? If this had not been such a public transaction, I could imagine a restructuring of the transaction to be legit. But since it is well know that Brady won the truck and the truck would not be given to Butler without Brady's consent, I can't imagine that Brady can avoid the income and gift tax consequences of his decision.

Maybe this will be one of those situations where the IRS turns their head and ignores what happens.

Posted by: Substance Over Form?? | Feb 9, 2015 8:20:06 AM