I mean by "paying" judges with Promos that are worth thousands of dollars on the 2nd hand market? Is this normal practice? I mean if I open a grocery store, can I just "gift" people products once a month and have them "volunteer" for me so it doesn't show up on my tax return and I don't pay their insurance or anything? I have no idea how this works.
From my understanding its a volunteer program and they're rewarded with incentives. The secondary market is not something that WotC controls obviously. I highly doubt a company could perform something in the public eye in front of millions of people that would be deemed illegal like that and get away with it.
I mean back in the days the promos were like worth $10-20 and it was like a cool thing to have but with no real value. But the FOW promo recently is literally worth close to $1k each and alot of people got multiples of it. Does it become a wage more than an incentive at a certain point in the eyes of the IRS? I mean if I "gifted" my "volunteer" with a 70k antique painting once a year every year as "incentive" I'm pretty sure the IRS would be on my ass.
I mean by "paying" judges with Promos that are worth thousands of dollars on the 2nd hand market? Is this normal practice? I mean if I open a grocery store, can I just "gift" people products once a month and have them "volunteer" for me so it doesn't show up on my tax return and I don't pay their insurance or anything? I have no idea how this works.
If I drew doodles on paper and handed it to you for "volunteering" to cut my lawn, do you think the law would care at all? Why should it matter whether or not the doodles are worth something to someone else, to me they are just doodles. It's a strange situation because until Hasbro hands over the cards and they enter the secondary market they are basically worthless pieces of paper. I could see potential issue if they started selling individual cards and then giving those away for profit because then those cards would have non-trivial value while they are "in stock".
I mean by "paying" judges with Promos that are worth thousands of dollars on the 2nd hand market? Is this normal practice? I mean if I open a grocery store, can I just "gift" people products once a month and have them "volunteer" for me so it doesn't show up on my tax return and I don't pay their insurance or anything? I have no idea how this works.
The cost of the rewards themselves to Wizard's finances are negligible. It's the cost of printing (and maybe new art), spread over the thousands of the cards and thus next to nothing, so Wizards are not liable for additional taxes. The value of the rewards as they print them is essentially nothing; Wizards don't care about the secondary market.
The players, on the other hand, are liable for capital gains. They're getting something for nothing and selling it for hundreds (sometimes thousands) of dollars. That's 100% eligible for capital gains.
Tldr: Wizards aren't doing anything dodgy, if anyone is dodging taxes it's the judges receiving and selling the promos.
This post highlights the main point - this is income to the judges receiving them - regardless of whether or not they are sold. In the US, I would think it would be considered ordinary income...the big question is whether or not it is considered wage income. If it was, either WOTC (if the judges were deemed to be employees) and/or the judges (if they were deemed employees or independent contractors) would be liable for FICA taxes on top of the regular taxes, and there are other cans of worms associated with that.
Interesting question.
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I mean by "paying" judges with Promos that are worth thousands of dollars on the 2nd hand market? Is this normal practice? I mean if I open a grocery store, can I just "gift" people products once a month and have them "volunteer" for me so it doesn't show up on my tax return and I don't pay their insurance or anything? I have no idea how this works.
The cost of the rewards themselves to Wizard's finances are negligible. It's the cost of printing (and maybe new art), spread over the thousands of the cards and thus next to nothing, so Wizards are not liable for additional taxes. The value of the rewards as they print them is essentially nothing; Wizards don't care about the secondary market.
The players, on the other hand, are liable for capital gains. They're getting something for nothing and selling it for hundreds (sometimes thousands) of dollars. That's 100% eligible for capital gains.
Tldr: Wizards aren't doing anything dodgy, if anyone is dodging taxes it's the judges receiving and selling the promos.
This post highlights the main point - this is income to the judges receiving them - regardless of whether or not they are sold. In the US, I would think it would be considered ordinary income...the big question is whether or not it is considered wage income. If it was, either WOTC (if the judges were deemed to be employees) and/or the judges (if they were deemed employees or independent contractors) would be liable for FICA taxes on top of the regular taxes, and there are other cans of worms associated with that.
Interesting question.
It's not income until the cards are sold; collectibles, even with equivalent cash value, aren't considered income until a gain is made, because they're taxed as capital gains.
Wizards itself isn't giving out the cards in exchange for a service rendered, since judges don't render services to Wizards, but rather to tournament organizations. The benefit Wizards gains from having a robust tournament scene is economic (in the legal sense; i.e., theoretical, hypothetical, impossible to assign a firm value to), and so they can't be shown to be providing a benefit with a fair market value to Wizards, so I don't think you can argue an employee-employer relationship at any point. Finally, the cards Wizards gives out don't have any collectible value at point of origin, and they're gifted to the recipients without consideration, so I don't think any tax liability attaches there.
Basically, Judges should be claiming the profit from judge promo card sales as income, but the issue is detection and enforcement. That would apply no matter when the card is sold; the difference is only the long-term gains rate vs. the short-term gains rate.
Basically, Judges should be claiming the profit from judge promo card sales as income, but the issue is detection and enforcement. That would apply no matter when the card is sold; the difference is only the long-term gains rate vs. the short-term gains rate.
In theory, everyone selling cards (whether in person, on Ebay, or whatever) should be doing that, but in practice, no one does and unless you're making a ton of money doing it, the relevant tax agencies aren't really going to come after you if you don't report it. But then again there are a lot of parts of tax law that are in the books but wouldn't be reasonable to attempt to enforce or even reasonable to ask everyone to follow just because they're prohibitively complicated and/or onerous for the average person.
I mean by "paying" judges with Promos that are worth thousands of dollars on the 2nd hand market? Is this normal practice? I mean if I open a grocery store, can I just "gift" people products once a month and have them "volunteer" for me so it doesn't show up on my tax return and I don't pay their insurance or anything? I have no idea how this works.
The cost of the rewards themselves to Wizard's finances are negligible. It's the cost of printing (and maybe new art), spread over the thousands of the cards and thus next to nothing, so Wizards are not liable for additional taxes. The value of the rewards as they print them is essentially nothing; Wizards don't care about the secondary market.
The players, on the other hand, are liable for capital gains. They're getting something for nothing and selling it for hundreds (sometimes thousands) of dollars. That's 100% eligible for capital gains.
Tldr: Wizards aren't doing anything dodgy, if anyone is dodging taxes it's the judges receiving and selling the promos.
This post highlights the main point - this is income to the judges receiving them - regardless of whether or not they are sold. In the US, I would think it would be considered ordinary income...the big question is whether or not it is considered wage income. If it was, either WOTC (if the judges were deemed to be employees) and/or the judges (if they were deemed employees or independent contractors) would be liable for FICA taxes on top of the regular taxes, and there are other cans of worms associated with that.
Interesting question.
It's not income until the cards are sold; collectibles, even with equivalent cash value, aren't considered income until a gain is made, because they're taxed as capital gains.
Wizards itself isn't giving out the cards in exchange for a service rendered, since judges don't render services to Wizards, but rather to tournament organizations. The benefit Wizards gains from having a robust tournament scene is economic (in the legal sense; i.e., theoretical, hypothetical, impossible to assign a firm value to), and so they can't be shown to be providing a benefit with a fair market value to Wizards, so I don't think you can argue an employee-employer relationship at any point. Finally, the cards Wizards gives out don't have any collectible value at point of origin, and they're gifted to the recipients without consideration, so I don't think any tax liability attaches there.
Basically, Judges should be claiming the profit from judge promo card sales as income, but the issue is detection and enforcement. That would apply no matter when the card is sold; the difference is only the long-term gains rate vs. the short-term gains rate.
I think it would be pretty hard to make the argument that the judges are not earning the promos by working the event, though I don't know the relevant case law/statutes off the top of my head. Further, I honestly am not that familiar with the program, but from what I've read it sounds like judges receive them for services rendered.
I think you could pretty easily assign the FMV of the cards as WOTC's economic benefit; I'm not sure WOTC's relatively small expense to produce it is particularly relevant. I don't think you can say the promos are given without consideration - can you receive them other than participating in events as a judge?
Certainly you are right that profit upon sale must be realized; I don't think it is cut and dry just because they fall under the category of collectible for most taxpayers. Earning value is usually a taxable event when services are performed - regardless of how you are compensated for those services (cash, or barter). You are right that perhaps it is simply not enforceable or detectable, but if the values being discussed in here for the promos (hundreds/thousands) are the norm, it may be a point of interest sometime.
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I find this a very interesting question. Right now the promos are fairly immaterial in value and probably aren't declared by judges, but lets say in the future they make a limited print run of 5 Foil Judge Promo Black Lotus and hand them out to just five judges. The value of those things would be astronomical (more than a small car) and would certainly be considered a gift at the very least, if not outright income. Gifts are taxed by the IRS too.
I am also pretty sure that paying someone with goods doesn't nullify the need to pay income taxes. You can't, for example, pay a CEO 10k in salary that gets taxes at normal levels and a rare Van Gogh every year and expect that the IRS won't see right through that.
I mean by "paying" judges with Promos that are worth thousands of dollars on the 2nd hand market? Is this normal practice? I mean if I open a grocery store, can I just "gift" people products once a month and have them "volunteer" for me so it doesn't show up on my tax return and I don't pay their insurance or anything? I have no idea how this works.
The cost of the rewards themselves to Wizard's finances are negligible. It's the cost of printing (and maybe new art), spread over the thousands of the cards and thus next to nothing, so Wizards are not liable for additional taxes. The value of the rewards as they print them is essentially nothing; Wizards don't care about the secondary market.
The players, on the other hand, are liable for capital gains. They're getting something for nothing and selling it for hundreds (sometimes thousands) of dollars. That's 100% eligible for capital gains.
Tldr: Wizards aren't doing anything dodgy, if anyone is dodging taxes it's the judges receiving and selling the promos.
This post highlights the main point - this is income to the judges receiving them - regardless of whether or not they are sold. In the US, I would think it would be considered ordinary income...the big question is whether or not it is considered wage income. If it was, either WOTC (if the judges were deemed to be employees) and/or the judges (if they were deemed employees or independent contractors) would be liable for FICA taxes on top of the regular taxes, and there are other cans of worms associated with that.
Interesting question.
It's not income until the cards are sold; collectibles, even with equivalent cash value, aren't considered income until a gain is made, because they're taxed as capital gains.
Wizards itself isn't giving out the cards in exchange for a service rendered, since judges don't render services to Wizards, but rather to tournament organizations. The benefit Wizards gains from having a robust tournament scene is economic (in the legal sense; i.e., theoretical, hypothetical, impossible to assign a firm value to), and so they can't be shown to be providing a benefit with a fair market value to Wizards, so I don't think you can argue an employee-employer relationship at any point. Finally, the cards Wizards gives out don't have any collectible value at point of origin, and they're gifted to the recipients without consideration, so I don't think any tax liability attaches there.
Basically, Judges should be claiming the profit from judge promo card sales as income, but the issue is detection and enforcement. That would apply no matter when the card is sold; the difference is only the long-term gains rate vs. the short-term gains rate.
I am going to say you may be arguing this wrong.
First off, a collectible isn't something you get paid with for work. Second, why is WoTC giving these to every judge at ever GP, with easily 10-20 different organizers holding events, if they aren't a form of compensation?
I could see an argument they are equivalent to stock options. When I get them I don't know what they are worth, as the value of a judge foil is up to the market to make. Maybe they are worth x times a regular foil, or x times the value of a regular card if no foil exists. Then let the market decide what the real value is.
Either way the judges should be reporting something as income.
I am guessing that the change to the foil program does have something to do with judges potential status as employees/contractors. It just doesn't make sense to change otherwise.
First off, a collectible isn't something you get paid with for work. Second, why is WoTC giving these to every judge at ever GP, with easily 10-20 different organizers holding events, if they aren't a form of compensation?
I could see an argument they are equivalent to stock options. When I get them I don't know what they are worth, as the value of a judge foil is up to the market to make. Maybe they are worth x times a regular foil, or x times the value of a regular card if no foil exists. Then let the market decide what the real value is.
Either way the judges should be reporting something as income.
Definition matter, in law. The cards judges receive aren't in exchange for judging at any specific event; they're in exchange for being active members of the volunteer judging program administered by Wizards. That activity takes the form of judging at events isn't relevant for the purposes of the Wizards-Judge relationship, because the Judges aren't performing a service for Wizards directly; any economic benefit Wizards receives from the activity can't be accounted for. It's an unknowable number. (It's also important to remember that the promos are given out without much regard to the amount of judging activity, or the level of judging activity)
It's good that you brought up stock options. Stock options are also taxed as capital gains at the point of sale by the recipient, not at the time of assignment. The only time a stock option would require the company giving the option (or the recipient) to pay applicable taxes at the time of assignment is if the option was explicitly offered in lieu of a certain amount of salary or other payment. The reason for that is because the company giving the options is then clearly gaining a known value by offering the option. Because cards don't have a known value at the time of assignment, they can't be taxed at that point. Also, in the case of collectibles, the creator of the collectible isn't required to pay tax on anything other than the fair market value of the collectible's materials at time of creation, unless it was transferred for consideration, in which case the fair market value of the consideration is what the taxes are calculated with. In the case of a Magic card printed and gifted without consideration, the most Wizards would have to pay is fractions of a penny, at best, per card. It's a rounding error, and likely exempted regardless as a business promotion expense.
It's also good that you brought up the fact that the fair market value of a card isn't known until the sale is completed. Because there's no known value for the card prior to the sale, it's not possible to tax it as income - how much should you tax? To avoid those issues, taxes are only assessed when there can be a known fair market value - i.e., a definite cash equivalent was set - which is at the point when the asset is sold.
Judges (and anyone who sells Magic cards) should absolutely be reporting gains on card sales as income, as I indicated. The only problem is that enforcement isn't really possible in such cases and unless the collectible is being transferred in exchange for tens of thousands of dollars (or millions, in the case of Action Comics #1), it's also not worth any tax authority's time to work to collect it.
The judge foil packets aren't guaranteed either. They are a gift from wizards for what we do. Judge foils have a long history before their circulation at Grand Prix. One of the more senior judges blogged about the history of judge foils. http://blogs.magicjudges.org/timedistortion/2014/07/31/foiled/
Secondly, the packets are definitely not worth thousands of dollars. At vendors you get at most 200 dollars a packet, and most judges get 2 packets. That's assume you are the first to sell it. Subsequent packets get much less. Many dealers eventually stop offering cash for the packet and only give credit. Lately the packets have lots of EDH generals, which don't sell particularly well; packets go for less than 150 often. The event is run by a Tournament Organizer (SCG, Pastimes, Legion, PES, etc) and sorta sponsored by Wizards. So the TO pays the judges the compensation, and the Wizards sponsor gives a small gift to the judges. Many TOs have judges fill out tax information if they write a check to the judges. Foil packets aren't factored into the compensation package. Generally speaking, you received the foils if you judged two days. Judging 3 days doesn't give you any more packets than judging 2. So it's a bonus gift, not a part of the compensation
The point is rather moot as Grand Prix foil packets are being removed from the judge program and replaced with a new distribution system.
It's good that you brought up stock options. Stock options are also taxed as capital gains at the point of sale by the recipient, not at the time of assignment.
That's because when options are granted they have no value. That is, you get options at the current price of the stock. If you were granted options with a strike price lower than the current price of the stock, then of course it would be taxable income.
In Sweden you pay taxes on money you earn, you do not pay taxes for being given something that might have monetery value its not untill you sell that item for profit and that it is deemed enough to being charged tax for.
It would be quite absurd if you had to pay taxes for being given something for example your birthday.
Not sure how it works in other countries bu thats how it works here in Sweden.
Give soneone a house for their birthday. See if it gets taxed.
Tax agencies choose their fights. They oeave your bday presents alone bexause they have immaterial value.
I am probably every color-combination it is possible to be, though it's really hard to figure out what it would mean to be 4-colored....it doesn't seem logical to be 4-colored without being 5-colored.
In Sweden you pay taxes on money you earn, you do not pay taxes for being given something that might have monetery value its not untill you sell that item for profit and that it is deemed enough to being charged tax for.
It would be quite absurd if you had to pay taxes for being given something for example your birthday.
Not sure how it works in other countries bu thats how it works here in Sweden.
Give soneone a house for their birthday. See if it gets taxed.
Tax agencies choose their fights. They oeave your bday presents alone bexause they have immaterial value.
in sweden you actually can give away your house tax free, i can go into further details later or in pm dont wanna get too off topic.
In America, you're only allowed to give so much before it becomes taxable. Or something like that. I'm not a tax specialist.
Edit: Will work in exchange for free Swedish house.
In 2014, you have an annual gift exclusion of $14,000 (this number changes each year), and an unlimited gift exclusion if it is to a spouse. I'm studying for the CPA exam right now so I have to know random stuff like this.
It would be quite absurd if you had to pay taxes for being given something for example your birthday.
The law is in an attempt to curb petty tax evasion cases like you are on your deathbed and you give away all your money just before you die so that your estate does not get taxed. That type of thing. It is very unlikely that these types laws are ever enforced in cases where the state is not sure that there is a real concerted effort at tax evasion.
Well in that case isn't WOTC giving out like millions (probably not accurate) worth of "gifts" every year? I don't know how many promo FOWs there are but there should be a lot.
Well in that case isn't WOTC giving out like millions (probably not accurate) worth of "gifts" every year? I don't know how many promo FOWs there are but there should be a lot.
Because WotC only sells cards on the primary market (as opposed to the secondary one), the "gifts" are worth well less than $0.25 a piece to them.
So it only matters what it's worth to them? If Picasso paints something valued by experts and the 2nd hand market for $10 million but technically its only worth the paint and canvas it's painted on, it's legit? Not trying to be snide, I literally have no idea how this works.
So it only matters what it's worth to them? If Picasso paints something valued by experts and the 2nd hand market for $10 million but technically its only worth the paint and canvas it's painted on, it's legit? Not trying to be snide, I literally have no idea how this works.
If Picasso makes $10 million on the sale of a painting, he'd have to pay taxes on that gain.
If, on the other hand, he gives away a painting, and the owner then sells it for $10 million, Picasso doesn't have to pay taxes on the other person's capital gain.
Ok, so whenever the gift gets converted to money, is when the tax is applied, gotcha.
I guess the other questions is, does these "gifts" equate to an actual wage? For example I'm sure alot of judges make more money than a part time job selling the cards on ebay.
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If I drew doodles on paper and handed it to you for "volunteering" to cut my lawn, do you think the law would care at all? Why should it matter whether or not the doodles are worth something to someone else, to me they are just doodles. It's a strange situation because until Hasbro hands over the cards and they enter the secondary market they are basically worthless pieces of paper. I could see potential issue if they started selling individual cards and then giving those away for profit because then those cards would have non-trivial value while they are "in stock".
This post highlights the main point - this is income to the judges receiving them - regardless of whether or not they are sold. In the US, I would think it would be considered ordinary income...the big question is whether or not it is considered wage income. If it was, either WOTC (if the judges were deemed to be employees) and/or the judges (if they were deemed employees or independent contractors) would be liable for FICA taxes on top of the regular taxes, and there are other cans of worms associated with that.
Interesting question.
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It's not income until the cards are sold; collectibles, even with equivalent cash value, aren't considered income until a gain is made, because they're taxed as capital gains.
Wizards itself isn't giving out the cards in exchange for a service rendered, since judges don't render services to Wizards, but rather to tournament organizations. The benefit Wizards gains from having a robust tournament scene is economic (in the legal sense; i.e., theoretical, hypothetical, impossible to assign a firm value to), and so they can't be shown to be providing a benefit with a fair market value to Wizards, so I don't think you can argue an employee-employer relationship at any point. Finally, the cards Wizards gives out don't have any collectible value at point of origin, and they're gifted to the recipients without consideration, so I don't think any tax liability attaches there.
Basically, Judges should be claiming the profit from judge promo card sales as income, but the issue is detection and enforcement. That would apply no matter when the card is sold; the difference is only the long-term gains rate vs. the short-term gains rate.
In theory, everyone selling cards (whether in person, on Ebay, or whatever) should be doing that, but in practice, no one does and unless you're making a ton of money doing it, the relevant tax agencies aren't really going to come after you if you don't report it. But then again there are a lot of parts of tax law that are in the books but wouldn't be reasonable to attempt to enforce or even reasonable to ask everyone to follow just because they're prohibitively complicated and/or onerous for the average person.
I think it would be pretty hard to make the argument that the judges are not earning the promos by working the event, though I don't know the relevant case law/statutes off the top of my head. Further, I honestly am not that familiar with the program, but from what I've read it sounds like judges receive them for services rendered.
I think you could pretty easily assign the FMV of the cards as WOTC's economic benefit; I'm not sure WOTC's relatively small expense to produce it is particularly relevant. I don't think you can say the promos are given without consideration - can you receive them other than participating in events as a judge?
Certainly you are right that profit upon sale must be realized; I don't think it is cut and dry just because they fall under the category of collectible for most taxpayers. Earning value is usually a taxable event when services are performed - regardless of how you are compensated for those services (cash, or barter). You are right that perhaps it is simply not enforceable or detectable, but if the values being discussed in here for the promos (hundreds/thousands) are the norm, it may be a point of interest sometime.
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I am also pretty sure that paying someone with goods doesn't nullify the need to pay income taxes. You can't, for example, pay a CEO 10k in salary that gets taxes at normal levels and a rare Van Gogh every year and expect that the IRS won't see right through that.
I am going to say you may be arguing this wrong.
First off, a collectible isn't something you get paid with for work. Second, why is WoTC giving these to every judge at ever GP, with easily 10-20 different organizers holding events, if they aren't a form of compensation?
I could see an argument they are equivalent to stock options. When I get them I don't know what they are worth, as the value of a judge foil is up to the market to make. Maybe they are worth x times a regular foil, or x times the value of a regular card if no foil exists. Then let the market decide what the real value is.
Either way the judges should be reporting something as income.
Definition matter, in law. The cards judges receive aren't in exchange for judging at any specific event; they're in exchange for being active members of the volunteer judging program administered by Wizards. That activity takes the form of judging at events isn't relevant for the purposes of the Wizards-Judge relationship, because the Judges aren't performing a service for Wizards directly; any economic benefit Wizards receives from the activity can't be accounted for. It's an unknowable number. (It's also important to remember that the promos are given out without much regard to the amount of judging activity, or the level of judging activity)
It's good that you brought up stock options. Stock options are also taxed as capital gains at the point of sale by the recipient, not at the time of assignment. The only time a stock option would require the company giving the option (or the recipient) to pay applicable taxes at the time of assignment is if the option was explicitly offered in lieu of a certain amount of salary or other payment. The reason for that is because the company giving the options is then clearly gaining a known value by offering the option. Because cards don't have a known value at the time of assignment, they can't be taxed at that point. Also, in the case of collectibles, the creator of the collectible isn't required to pay tax on anything other than the fair market value of the collectible's materials at time of creation, unless it was transferred for consideration, in which case the fair market value of the consideration is what the taxes are calculated with. In the case of a Magic card printed and gifted without consideration, the most Wizards would have to pay is fractions of a penny, at best, per card. It's a rounding error, and likely exempted regardless as a business promotion expense.
It's also good that you brought up the fact that the fair market value of a card isn't known until the sale is completed. Because there's no known value for the card prior to the sale, it's not possible to tax it as income - how much should you tax? To avoid those issues, taxes are only assessed when there can be a known fair market value - i.e., a definite cash equivalent was set - which is at the point when the asset is sold.
Judges (and anyone who sells Magic cards) should absolutely be reporting gains on card sales as income, as I indicated. The only problem is that enforcement isn't really possible in such cases and unless the collectible is being transferred in exchange for tens of thousands of dollars (or millions, in the case of Action Comics #1), it's also not worth any tax authority's time to work to collect it.
http://blogs.magicjudges.org/timedistortion/2014/07/31/foiled/
Secondly, the packets are definitely not worth thousands of dollars. At vendors you get at most 200 dollars a packet, and most judges get 2 packets. That's assume you are the first to sell it. Subsequent packets get much less. Many dealers eventually stop offering cash for the packet and only give credit. Lately the packets have lots of EDH generals, which don't sell particularly well; packets go for less than 150 often. The event is run by a Tournament Organizer (SCG, Pastimes, Legion, PES, etc) and sorta sponsored by Wizards. So the TO pays the judges the compensation, and the Wizards sponsor gives a small gift to the judges. Many TOs have judges fill out tax information if they write a check to the judges. Foil packets aren't factored into the compensation package. Generally speaking, you received the foils if you judged two days. Judging 3 days doesn't give you any more packets than judging 2. So it's a bonus gift, not a part of the compensation
The point is rather moot as Grand Prix foil packets are being removed from the judge program and replaced with a new distribution system.
That's because when options are granted they have no value. That is, you get options at the current price of the stock. If you were granted options with a strike price lower than the current price of the stock, then of course it would be taxable income.
Give soneone a house for their birthday. See if it gets taxed.
Tax agencies choose their fights. They oeave your bday presents alone bexause they have immaterial value.
People need to read this fanfiction, though:
www.hpmor.com
I am probably every color-combination it is possible to be, though it's really hard to figure out what it would mean to be 4-colored....it doesn't seem logical to be 4-colored without being 5-colored.
Edit: Will work in exchange for free Swedish house.
In 2014, you have an annual gift exclusion of $14,000 (this number changes each year), and an unlimited gift exclusion if it is to a spouse. I'm studying for the CPA exam right now so I have to know random stuff like this.
The law is in an attempt to curb petty tax evasion cases like you are on your deathbed and you give away all your money just before you die so that your estate does not get taxed. That type of thing. It is very unlikely that these types laws are ever enforced in cases where the state is not sure that there is a real concerted effort at tax evasion.
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If Picasso makes $10 million on the sale of a painting, he'd have to pay taxes on that gain.
If, on the other hand, he gives away a painting, and the owner then sells it for $10 million, Picasso doesn't have to pay taxes on the other person's capital gain.
I guess the other questions is, does these "gifts" equate to an actual wage? For example I'm sure alot of judges make more money than a part time job selling the cards on ebay.