Quantcast

Getty Images/Christian Petersen

Tom Brady was named the Super Bowl MVP after his 37/50 for 328 yards and 4 touchdown performance but Malcolm Butler was the true MVP. His interception at the goal line saved the Super Bowl for the Patriots.

To show his appreciation to Butler, Brady is giving him his 2015 Chevrolet Colorado that he won for being the game's MVP. But no good deed goes unpunished. By giving Butler the vehicle, Brady will have to answer to the IRS.

Forbes

According to ESPN, Brady has decided to gift the truck to Patriots rookie cornerback Malcolm Butler, who made the game-clinching interception on Sunday night. This is not a taxable event at all for Butler–gifts are never taxed to the recipient.


Brady is not so lucky. He’s going to have to pay gift tax on this transaction. The tax code only allows you to give $14,000 tax free from any one person to any one person before assessing a donor level tax on the gift.

Assuming this will be Brady’s only gift to Butler this year, the transaction sets up a taxable gift for Brady of $20,000 (the $34,000 value of the truck minus the $14,000 gift tax exclusion). Assuming Brady has made at least $1 million $5.25 million of taxable gifts up to this point in his life (a safe bet), he will owe a 40 percent gift tax on this $20,000 taxable gift. That’s an $8000 gift tax on top of a $13,500 income tax on the truck, for a combined federal tax hit of $21,500.

That’s over half the value of the truck itself.

As they say, there are only three things guaranteed in life. Death, Taxes and Tom Brady being an awesome.

H/T Profootball Talk

Follow me on Twitter @ETthomehome

Read more of my work here

Thome 2/06/2015 12:12:00 PM Edit
______________________________________________________________________________________

« Prev Post Next Post »


_____________________________________________________________________________________

    Powered by Blogger.