With regard to Jules Rabin’s column last week on Tom Brady’s tax bill, a couple of things. I agree with the immediate tax hit on his bonus, although many companies withhold a flat rate of 28 percent, so it’s possible that the federal withholding was only $27,160. He would be responsible for the difference either in the form of an estimated tax payment or on his 2015 tax return. Of course, with tax deductions and other write-offs, it might come out a little less.
However, with regard to the gift tax, unless Mr. Brady has gifted $5,430,000 over his lifetime, there is no gift tax on the truck. There would be an estate tax upon his death. He would have to file a gift tax return since it is over $14,000 to one individual, but he wouldn’t have to pay tax. What he could have done to avoid even filing is make it a joint gift from him and Giselle. This way, if the truck was valued less than $28,000, he wouldn’t even have to file at all.
Ultimately, though, Mr. Brady, or should I say his advisers, proved smarter than us all. He went to Chevy and told them to give the truck to his teammate. Now he has no gift tax filing, but as for his teammate, Malcolm Butler, he would have to pick up the value of the truck as income. Had it been a gift from Mr. Brady, then he wouldn’t have to declare it.
Either way, as Mr. Rabin said, start gathering your tax information — April 15 is a short time away!
Stuart A. Hack, EA, MS, Wellington
