By Nathan Vinson, attorney
English, Lucas, Priest and Owsley, LLP
An interesting question popped up in social media during the 2016 Summer Olympics: will U.S. athletes taking home a medal be taxed on the value of it – particularly those who win the gold?
News accounts have confirmed that yes, U.S. medal-winning athletes will be taxed, but not on the value of the medal itself. It’s the cash prize that comes with each medal that is taxed.
Swimmer Michael Phelps, who has broken all kinds of records this year, may owe the government $55,000 in taxes for the cash prizes that go along with his five gold medals and one silver medal, reports USA Today. Each gold medal is accompanied by a check for $25,000, while each silver earns $15,000 and each bronze $10,000. If Phelps is taxed at the highest income tax rate of 39.6 percent, he would owe around $55,000, the newspaper reports. I checked the math, and yes, that’s about right.