Today's one of those good news, potential bad news days for Al Gore.
More on the use of the qualifier "potential" in a minute. First, let's look at Al's decidedly good news.
The former Veep got the news today that he and the Intergovernmental Panel on Climate Change were awarded the 2007 Nobel Peace Prize. He obviously is very gratified to have the Nobel Committee recognize his efforts to educate folks about global warming and work toward ways to stem environmental disaster. You can read the award announcement here.
But Al is human, despite his dance moves to the contrary. So he's also got to be taking a little in-your-face joy from the fact that his Nobel Prize is making rabid right wingers apoplectic.
More good news for Al. In addition to the recognition factor, he gets half of the award's financial remuneration.
"Say it with cash" has always been one of my personal mottoes, and the Nobel folks sure know how to do just that.
Al's monetary portion of the 2007 Peace Prize is approximately $1.8 million dollars.
Taxes and prizes: And that's where the potential bad news for Al comes in. According to the IRS:
"If you were awarded a prize in recognition of accomplishments in religious, charitable, scientific, artistic, educational, literary, or civic fields, you generally must include the value of the prize in your income."
Before you turn down your Nobel Prize, keep reading. The IRS also says that you can keep the prize money out of your taxable income if you meet all of the following three requirements:
- You were selected without any action on your part to enter the contest or proceeding.
- You are not required to perform substantial future services as a condition for receiving the prize or award.
- You give the prize or award to a governmental unit or tax-exempt charitable organization.
You can read more on the tax-exemption rules here. Al's tax advisers no doubt did.
One of the components of point #3 is that the money go directly to a qualified charity or governmental unit rather than passing through the award winner's hands or bank account.
Now I don't know who handles Al and Tipper's taxes, but I suspect that since Al had been heavily favored to win the Peace Prize, his on-the-ball tax planners established a mechanism by which the Nobel money will go directly to the Alliance. It probably was easy, since those same advisers also likely helped him establish the group last year.
So congrats to Al and the Intergovernmental Panel on Climate Change for winning this year's Peace Prize, best wishes to the Alliance in spending the Nobel cash, and kudos to all the tax advisers who keep Al and the rest of us from overpaying our taxes.