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Monday, August 9, 2021

Olympic Taxes: Katie Ledecky Faces $44,000 U.S. Tax Bill, Katie Nageotte $0

Bloomberg, Ledecky May Owe U.S. $44,000 in Taxes for Olympics Glory:

Because the Olympic flame goes out in Tokyo on Sunday, marking the top of the 2020 Video games, swimming phenom Katie Ledecky and pole vaulting sensation Katie Nageotte will each be leaving with gold.

A hefty tax invoice awaits again within the U.S., however just for certainly one of them.

Ledecky, now essentially the most embellished feminine swimmer of all time, possible owes the U.S. authorities about $44,000 from her two gold and two silver medal wins. That estimate is predicated on her profitable company sponsorships and the prize cash hooked up to her medals.

Nageotte, who received gold in girls’s pole vaulting, possible received’t pay any taxes on her winnings, because of a particular exemption for these with extra modest monetary success.

Olympic medals don’t have a lot intrinsic worth, fluctuating from as much as $700 for a gold to about $5 for a bronze, relying available on the market costs of their part metals. However that isn’t the main focus of the Inner Income Service. Relatively, it’s the prize cash the USA Olympic & Paralympic Committee awards its medalists. …

Winnings are handled as revenue for federal tax functions, below Part 74 of the Inner Income Code. For top-earning athletes like Ledecky, who makes over 1,000,000 {dollars} a 12 months in endorsements in response to a report within the Washington Submit, whole prize cash is topic to the top-marginal tax charge of 37%.

Nageotte, then again, is spared paying tax by an Obama-era regulation (H.R.5946) that exempts athletes making lower than $1 million in whole revenue after deductions from the so-called “victory tax.”

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