Wednesday, October 22, 2008

Republicans bought Sarah Palin $150,000 in clothes last month That's also a gift. And it's a taxable gift.

It doesn't matter if it's for work. And it doesn't matter if the Republicans now say they're going to donate the clothes to charity after it's over.

Sarah Palin can't accept $150,000 dollars in goods, use them, then later give them away to charity and not pay taxes on the gift she received. By the time she gives them away to charity, they're used clothes - and worth about 1/3 of their original value. So, sure, she can take a tax deduction on the $50,000 in clothes she's giving away (a savings of perhaps $15k or so), but she still has to pay $50k or so in taxes on the $150,000 gift she received in the first place. That means Palin will owe $35,000 net in taxes due to her big shopping spree at Neiman Marcus and Saks. And the Republicans can't help her pay for it, or she'll be paying taxes on their help as well.

Of course, Palin is no stranger to failing to report her taxable income - she did the same thing while serving as governor of Alaska.

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