Oscar Goody Bags are Taxable Income

The IRS reminded actors and actresses that the "gifts" they receive at the Academy Awards are really taxable income. According to IRS Commissioner Mark Everson, "We want to make sure the stars 'walk the line' when it comes to these goodie bags." Last year's Oscar goody bag was worth about $70,000 and included chocolates, a pearl necklace, cosmetics, and Swavorski gift certificates. What's in this year's goody bag? Gourmet Food Guide Brett Moore says this year's bag contains gift certificates for gourmet cheese, a luxury vacation package, and an espresso maker -- and is worth about $100,000. What's the tax on $100,000? Using 2006 tax rates, and assuming that an actor is in the highest tax bracket of 35%, actors will pay about $35,000 extra in taxes just for receiving the the goody bag. For more information about the Academy Awards, visit Oscars.about.com.