February 17, 2015

A Chevrolet truck presented to Tom Brady for recognition as the New England Patriot’s MVP during the Super Bowl will instead pass to his teammate, Malcolm Butler. If Brady had received the truck and decided to pass it on to Butler as a gift, the vehicle valued at $35,000 may have created a taxable income event for Brady. If Brady has already exceeded his lifetime gift giving under the tax code, he, too, would have been in the midst of a taxable event.

Butler will be responsible for paying the income taxes linked to receiving the vehicle instead. The idea was spurred when Brady told a Boston radio station shortly after the Super Bowl that he’d like to give the vehicle to Butler, a rookie player who helped the Patriots earn their big win with his interception of Russell Wilson’s goal-line pass.

It’s important to understand that even with the best of intentions in gift-giving, if you’re not familiar with gift taxes and other tax consequences, you may face an unpleasant surprise. Do your planning in advance by talking about big gift transactions with an experienced attorney so that you are well-informed about your responsibilities and rights. Contact us today at info@lawesq.net.