Baseball Fan Owes $237 In Taxes For Free Doughnuts
Ticket to a Houston Astros baseball game: $38
Hot dog and a beer: $13
Winning 315 free doughnuts: Not So Priceless
Houston Astros baseball fan Bob Choate felt extra special on last year’s Fan Appreciation Day when he was selected as the recipient of 315 free coupons for doughnuts and coffee at Shipley Do-Nuts. Little did he know these little tokens of appreciation came as a package deal with an IRS 1099 form and an "I-OWE-YOU-$237" to the government.
Both Shipley Do-Nuts and the Astros thought the coupons were worth $927.61, valuing each one at $3. Because the estimated value of the coupons exceeded the $600 tax threshold, it was required for Mr. Choate to be issued an IRS 1099 tax form for his prize.
Mr. Choate would have received $302 for his tax return, but the “additional source of income” from the doughnut coupons caused his return to drop to $65, leaving him with a $237 deficit. A $237 dollar deficit—for free doughnuts—that you won on “Fan Appreciation Day.”
The fan appreciation seemed to have expired, just as coupons eventually do, when Mr. Choate contacted the Astros to appeal the charges. After receiving no assistance from the team, Lawrence Shipley, owner of the doughnut company, decided to help Mr. Choate out and offered to compensate him for the difference in taxes caused by the coupons.
The Astros must have been inspired by Mr. Shipley’s kind gesture, as they gave the Choate family an autographed Jeff Bagwell baseball and four tickets to their first home game of the season.
It looks as if there will be a happy ending to this “doughy” situation. While tax season isn’t typically something we all look forward to, we can at least appreciate not having to fill out yet another form—for “free” doughnuts.
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