… and yes, there is a tax connection beyond winning wagers being taxable income.
As is usual each Super Bowl Sunday, bets are getting a lot of attention.
There are the big-dollar wagers on the game. Two seven-figure bets were placed last week on the Philadelphia Eagles to defeat the Kansas City Chiefs in today's Super Bowl LVII championship game.
Then there are the prop bets, many of which have nothing to do with National Football League plays on the field.
For any of those bets that pay off, the winners will owe taxes to the U.S. Treasury.
Goodies bet by mayors, governors: And we can't forget the government officials who are wagering that their city and state are better than their opponents.
At the local level, the standard exchange of culinary specialties is up for grabs.
Kansas City Mayor Quinton Lucas is will send his counterpart barbecue, beer, and coffee (along with some KC t-shirts) if the Eagles take the Lombardi Trophy. Philadelphia Mayor accepted the challenge and will send KC some of Philly's favorite pizza and beer.
.@QuintonLucasKC, it’s a deal.
I’m proud to wager a couple of Philly favorites:
– A large pie from @DownNorthPizza.
– A six-pack from @PhillyBrewing.And if our @eagles win (🤞) you can make a donation to @mannanourishes.#FlyEaglesFly | #ItsAPhillyThing https://t.co/dPW0bO3NgG
— Mayor Jim Kenney (@PhillyMayor) February 9, 2023
A couple of sweeteners, like T-shirts and donations to a hunger relief program, were thrown in there, too.
Statewide, Pennsylvania's governor doubled down, literally, with his Super Bowl bets. While the Chiefs officially are in Kansas City, Missouri, the city's border is on the state line with Kansas, expanding the team's geographic fan base. So Keystone State Gov. Josh Shapiro has bets with both Missouri Gov. Mike Parson and Kansas Gov. Laura Kelly.
Again, food is involved. Philly goodies on the betting line are cheesesteaks, specialty mini donuts, and soft pretzels. KC items include Black Angus beef and chocolate-covered sunflower seeds.
Artful sports on the line, too: But my favorite Super Bowl bet this year is the wager between two art museums.
Philadelphia Museum of Art and Kansas City's Nelson-Atkins Museum of Art have agreed that the loser will send a delegation with the loan of a master artwork, to be named later, to the winner.
UPDATE, Feb. 21, 2023: Since the Chiefs won the Super Bowl, Kansas City's Nelson-Atkins Museum will receive the Thomas Eakins painting "Sailing" (image below) from the Philadelphia Museum of Art. The work will go on temporary display in Kansas City by late April.
They've even have a hashtag, #MuseumBowl23, for some expectedly polite social media trash talk. If you want to get in on the cultural showdown, the Philadelphia Museum of Art is @philamuseum and Nelson-Atkins Museum is @nelson_atkins.
And if today's artsy bet has you wanting more art and sports mashups, check out Art But Make It Sports on Twitter and Instagram. These folks are amazing at matching up the two genres.
Art donations and tax valuations: Exchanges of fine art are regular occurrences between major museums. So is the lending of rare and valuable pieces of art by private owners.
Sometimes those owners also permanently donate paintings or sculptures or other displays to museums. They also in many cases claim a charitable tax break for their gifts to public museums.
As you might, the Internal Revenue Service is prepared for such gifts. Uncle Sam's tax collector has an Art Advisory Panel, comprised of up to 25 renowned art experts who serve without compensation.
These art experts help the IRS review and evaluate property appraisals submitted by taxpayers in support of the fair market value claimed for works of art included in federal income, estate, and gift tax cases in accordance with the Internal Revenue Code.
"Taxpayers may obtain a Statement of Value from the Service for an advance review of art valuation claims prior to filing the return. The Statement of Value may then be used to complete the taxpayer's return," according to the IRS web page on its art appraisal services.
The procedure generally is available for assessment of an item of art that has been appraised at $50,000 or more. The appraisal submitted must meet specific substantiation requirements. A user fee is charged for each request. Since Feb. 1, 2020, the fees for a Statement of Value are $7,500 for one to three items, and $400 for each additional item.
Art tax panel's latest report: The officially named Art Advisory Panel of the Commissioner of Internal Revenue also issues an annual fiscal year report. Its FY 2021 Annual Summary Report shows that the Panel reviewed 112 items with an aggregate taxpayer valuation of $155,816,250 on 27 taxpayer cases.
The average claimed value for an item reviewed by the Panel was $1,391,217.
The Panel recommended accepting the value of 39 items, which was 35 percent of the artworks presented.
It adjusted the values of 73 items, or 65 percent it was asked to assess. When IRS adjustments are made, we taxpayers tend to expect that the changes will favor the tax collector.
And in the cases of those 73 adjusted pieces of art values, the Art Advisory Panel's FY21 report says that it recommended total net adjustments of $16,806,838 to the claimed values, an 11 percent increase over what was presented by the owners.
Of course, some of those bumps up could have increased the value of estates, meaning more of them might face taxes. It could, however, also mean that donors got larger tax deductions for their cultural contributions.
So that almost $17 million increase earns this Super Bowl Sunday's By the Numbers honor.
You also might find these items of interest:
- Estate gets $14 million tax refund on value of art
- NFT scams in UK explode with digital asset's popularity
- Alec Baldwin accused of avoiding New York sales tax on disputed painting purchase
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