Tom Brady Faces the IRS

The Super Bowl champions, New England Patriots, will likely be celebrating their win for quite some time.  Yet, Tom Brady’s celebration might be short lived.  The 2015 Chevy Colorado truck Brady won as Super Bowl MVP is considered a taxable prize under the Internal Revenue Code, section 74.  It is taxed at Tom Brady’s marginal income tax rate of 39.6 percent.   

According to ESPN, Brady has decided to gift the truck to Patriots rookie cornerback Malcolm Butler, who made the astounding interception last Sunday night.  Fortunately, this is not a taxable event for Butler, since gifts are never taxed to the recipient.  Brady is not as lucky, as he will have to pay gift tax on this transaction (assuming this is his only gift this year).  The tax code only allots $14,000 tax free from any one person to any one person before assessing a donor level tax on the gift. 

Not only will Brady owe income tax and gift taxes on his MVP prize, but he will also get hit with taxes from his game check, which is about $97,000. 

See Ryan Ellis, IRS is Coming After Tom Brady’s Super Bowl MVP Truck, Forbes, Feb. 4, 2015.