Just look at the gift-strewn lead-up to Sunday's Grammy Awards: there's the Grammy Style Studio, where nominees select designer duds to wear to the show; the backstage Talent Lounge, which invites stars to pick from a selection that includes Gibson guitars and Gucci sunglasses; and the Grammy gift bag, packed with cosmetics, clothing, concert tickets and gift certificates galore.

Spawned by the increasing visibility and unceasing popularity of celebrity gifting, the Internal Revenue Service launched an outreach program last year to remind stars that, in Uncle Sam's eyes, swag counts as taxable income.
"There's been a great emergence of gifting and gifting suites, and fairly extravagant values associated with the gift bags and gift boxes," says IRS spokeswoman Beth Tucker. "We're reminding folks about the taxability of the gift bags, the gift suites, the swag."

In other words, all those freebies are taxable. If it's worth more than a bouquet of flowers, it belongs on your tax return.
As a result of the IRS effort, the Academy of Motion Pictures Arts and Sciences announced in August that it would end its longtime tradition of thanking superstar Oscar presenters with plush booty baskets (reportedly worth nearly $100,000) and pay taxes on gift bags already given. The Hollywood Foreign Press Association followed, stopping its goody-bag giveaway with last year's Golden Globes.

But fear not, swag-seeking stars. The fountain of freebies is far from dry.
Businesses large and small can't wait to give their products to celebrities, who can turn an unknown item into a must-have with the quick click of a paparazzo's camera. Companies clamor for inclusion in gift bags and gift suites, often paying a fee to be featured.

Whether it's an awards show, film festival or other entertainment event, where there are stars there are gift suites typically hotel rooms transformed into shopping centers where almost everything is free. Show-sponsored suites are a way to entice presenters and performers to come to rehearsals and thank them for participating.

Other gift rooms are just to thank the stars for being stars and get products into their hands. There was one official gift lounge attached to this year's Golden Globes and seven unofficial ones. Last month's Sundance Film Festival had no official gifting spots, yet photos of stars and their swag filled the pages of People and Us Weekly magazines.

Source: http://www.yahoo.com


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