Cincinnati Tax Resolution Powered by Toph Sheldon 9200 Montgomery Rd., Ste. 7B Cincinnati, OH 45242
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INSIDE
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Toph Recalls a Risky Valentine’s Day Venture With Ashley
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Island Hop on a Hassle-Free Adventure to These Travel Destinations Toph’s Tax Triumphs: Client Wins 90% Tax-Bill Cut Ashley’s Corner: Waking Up to a Snow Day Win Vodka Cream Pasta
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Toph’s Tax Nightmares: Midcentury Stars’ Weird Write-Offs
Fame, Fortune, and Foolhardy Write-Offs TOPH’S TAX NIGHTMARES!
While many taxpayers view the nation’s 37% top marginal tax rate as verging on extortion, it’s dwarfed by the 90%-plus rates of the 1940s and 1950s. After rising during the Great Depression and World War II, top marginal rates never fell below 70% through the early 1980s. Some great Hollywood stars of that era applied their creative talents to inventing novel tax deductions. The legendary comedian W. C. Fields tried to deduct gifts to his brother and sister as business payments for help with “story preparation.” Tax auditors were not amused. Party Hearty Celebrated film director George Cukor, who won an Oscar for “My Fair Lady,” drew no plaudits from the feds for claiming a party for another fabulous female, Tallulah Bankhead,
as a business expense. When Cukor deducted the cost of a lavish bash in Bankhead’s honor, tax officials ruled that “by no stretch of imagination could a party like that” be deemed necessary. Actors and Fame A film industry attorney made a strong case before Congress that actors, like oil wells, should be allowed a depletion allowance to account for the fleeting nature of their fame and earning power. Just as oil wells show big profits in their early years and eventually run dry, he claimed, actors who flame out deserve the same treatment. Congress wasn’t impressed. Just a Corporation Amid looser rules back then, Jack Benny and Dwight Eisenhower believed that big
financial gains (from Benny’s radio show and Ike’s bestselling memoir) should be treated as capital gains and taxed at that lower rate. Bing Crosby, Errol Flynn, and Bette Davis also set up corporations to receive and pay taxes at lower corporate rates. Work Stoppage Ronald Reagan claimed to limit himself to two films a year to hold down his income. Noting that any additional earnings would be taxed at a combined 91% state and federal rate, he asked, “Why should I have done a third picture, even if it was ‘Gone With the Wind?’” The pittance he would have received as take-home pay, the future president contended, wasn’t worth the work.
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