Update: Tax on Fancy Freebies
When we wrote about a few of Lash Fary's favorite possessions ("Things I Can't Live Without," March 2004), his marketing agency, Distinctive Assets, was putting together lavish goodie bags for celebrities at awards shows like the Oscars. Now the IRS has announced it will seek income taxes on that swag from the recipients. In response, the Academy of Motion Picture Arts and Sciences said it would halt the giving of gift bags at the Oscars.
Fary says he's not worried. Distinctive Assets will continue its corporate-sponsored gift-giving at the Emmys and Grammys. Even if the gift bags--which have been valued at up to $100,000 and have included loot like a $27,000 Las Vegas vacation package--are taxed at the highest bracket, it's still the equivalent of "going shopping at 60 percent off," Fary says.