Olimpic winning taxes?

[2rocky]

Randy, how would a good CPA deal with the Federal tax on olympic honorariums?

http://www.weeklystandard.com/blogs/go-gold-pay-irs_649187.html

For instance: Americans who win bronze will pay a $2 tax on the medal itself. But the bronze comes with a modest prize—$10,000 as an honorarium for devoting your entire life to being the third best athlete on the planet in your chosen discipline. And the IRS will take $3,500 of that, thank you very much.

There are also prizes that accompany each medal: $25,000 for gold, $15,000 for silver, and $10,000 for bronze.

Silver medalists will owe $5,385. You win a gold? Timothy Geithner will be standing there with his hand out for $8,986.

Wouldn't the athlete be able to expense some travel, and meals? Elucidate me..

 

[jryoung]

For the pros yes many of their expenses are deductible. Travels, training, coaches etc.etc. for some of the bigger names the prize money may not be that significant.

For the amateurs it's a bit different since it is prize money and they are not professionals. It would be similar to winning a raffle.

 

[devon deer]

This was never an issue years ago as only amateurs were allowed to compete in the olympics and no prize money was given.
My buddy ran for GB in the 70's and never got a penny, just accommodation and travelling which was paid direct to the provider.
Cheers
Richard