Blog Entry

Astros fan learns there's no free breakfast

Posted on: March 15, 2011 5:26 pm
Edited on: March 15, 2011 5:27 pm

By C. Trent Rosecrans

AstrosIt sounds like a riddle -- how much does a free doughnut and coffee cost?

Trick question, right? It's free!

Yeah, unless you're the IRS. According to the IRS, it's worth $927.61, and someone has to pay their part of that.

Houston resident Bob Choate received a 1099 from Washington's finest last month as secondary prize. The original prize was a year's worth of coupons for a coffee and a free doughnut or a dozen doughnut holes from Texas chain Shipely's Do-Nuts. He won the prize as part of the Astros' Fan Appreciation Day at Minute Maid Park.

Because the "fair market value" of the prize was more than $600, he was issued a 1099 stating the valueof the prize or gift. A glazed doughnut at Shipley's is 83 cents, a dozen doughnut holes are $1.25, as is a small cup of coffee. At a maximum bill of $2.50 times 365, the tax bill came out to approximately $927.61.

Choate said he's used about eight coupons and gave 30 to his son.

"I don't feel very appreciated," Choate told the Houston Chronicle. "If I had known this was going to cost this much. I wouldn't have accepted. It was pretty poorly handled. I don't think [the Astros] thought a lot about their customers when they had their Fan Appreciation Day. I know I'm not going to get the full taxable benefits out of this, that's for sure."

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Category: MLB

Since: Feb 16, 2007
Posted on: March 17, 2011 1:24 pm

This is why I can't be a full fledged Democrat

They want to stick it to anybody who gets anything.  Let the man enjoy his free doughnuts and coffee and stay out of his pockets! 

Since: Dec 3, 2010
Posted on: March 17, 2011 12:00 pm

Astros fan learns there's no free breakfast

Curious, how can he be taxed on an unrealized gain? Based on their ASSUMPTION of his coffee and donut DAILY is not a realizable gain.  I would fight it.  That's like if your stock portfolio was up today and the IRS made you pay taxes right then and there on that wouldn't be a gain until you sold it for the price, then you'd have a realizable gain.  So we the tax payers going to pay for an IRS agent to follow this man around and record how many coffee and donuts he's receiving through the year. The whole scenario is absolutely ludicrous.

Since: May 22, 2007
Posted on: March 16, 2011 6:43 am

Astros fan learns there's no free breakfast

It is somewhat comical this should happen to an Astros fan, who was appreciated to the tune of a $927.61 income tax burden. It's not like the Astros are at fault here and the writer who said it's the IRS Tax Code is partially correct. The real issue is the valuation of the coffee and doughnuts. Who in their right mind would eat coffee and donuts every single day for a year?

My wife has a similar issue with World Winner, where she uses points to get little things throughout the year and then gives them away as presents. I thought it was pretty harmless too, until she recieved a 1099 for 800 bucks. Although I didn't mind paying the freight for her using this free(ha ha) web site, I thought it was ironic that the IRS goes after something really small instead of the big fish who have been cooking the books for years.

My other question is "How baseball newsworthy is this story?"

Since: Feb 19, 2007
Posted on: March 15, 2011 6:48 pm

Astros fan learns there's no free breakfast

I don't know what's worse, this story, or the Astros being impugned by an Orioles fan.

Seriously, Peter Angelos is a much worse owner than Drayton McLane (and really, that's saying something), and the only reason the organization has any class whatsoever is due entirely to Andy MacPhail.

Since: Jan 2, 2007
Posted on: March 15, 2011 6:32 pm

Astros fan learns there's no free breakfast

But what about our US Government passing laws stating that for every transaction over $600 a business must issue a 1099 as a taxable item. I don't blame the Astros but rather our crazy IRS tax code that people in Washington decide on each year and never think of consequences. This prize winner is one of the exact reasons of what is wrong with the US Tax code. The real moral of the story is maybe people should not enter contests. Lottery and casino winnings are taxed too. Boy the US Treasury just never has enough money.

Since: Apr 8, 2009
Posted on: March 15, 2011 6:18 pm

Astros fan learns there's no free breakfast

Lesson learned: Don't eat donuts.

Seriously though, that's pretty stupid. If the Astros have any class (they don't) they would pay this for the guy.

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