Oh no......we taped in January and I know it said something in the contract about us being responsible for taxes...I would have to go back and read it again but now I am scared after hearing from you....I think we need a good tax accountant to tell us what to do!

Charmed-1

do you owe the irs 1600 dollars each ? or how does that work? thats $3200 the fair market value is based on $2800 I'm confused?????? anyone with any tax knowledge please respond before i decide to be on the show, heck for that much $ I can redo my room myself????

the easiest way would be to create a fake hotmail account when you get the ones you actually what to talk to, just don't go back to it. They will shut it down I think after 30 or 60 days.

Charmed: I reread our contract, and yes, there it was under Point 11. My neighbors' 1099's were slightly less (by about $20). I think the 1099 was tied into how much was spent by the designer on your room.

Son2gezus: You don't have to pay that amount to the IRS, but you have to pay tax on it as if it were income.


Still mad.....

We just received our 1099 also. Although it is a bummer, we still would have participated on the showing knowing this info ahead of time. I just don't think you can put a price tag on the entire experience. Fortunately paying taxes on the room is a lot easier on us than paying for the room had we designed it ourselves. I still think it's a win/win situation. For future homeowners - unless it would really create a hardship- it is so worth the experience. Don't let the tax issue scare you off. We could estimate about $300.00 approx. that will come out of pocket for the taxes? That's the price of an average end table. Spending three days with the most amazing people you've ever met? That's worth millions. It is truely the opportunity of a life time. Don't let it slip by!

ok that is good info, I don't even know what is happening with our application we already had our scout visit and now their telling us the shoot dates have been moved back to an undetermend date and their still looking at tapes soooo, I'm clueless but still hopeful

Oooh, that's frusterating SON2Gezus. I'm sorry you're having to wait so long in limbo. Maybe they need to find another pair of neighbors as fun as your group. They usually film at least two episodes in each city. That's strange that they've moved the filming date back. Hmmm...

our epis are deriving from a casting call even though we had our phone interveiw before the casting call and our scout visit was scheduled before the casting call too, they are still looking at tapes from the casting call, what does all this mean ???? I don't know, we just have too wait and see they told us they would be getting a hold us with a yes or no in a week or 2 after the scout visit and tommarow will be 2 weeks and still no word, all of my enthusiasm it windling down, guess I'm preparing myself for the worst, but if we make it I will be surprised, I am still hopeful, I remember the scout telling us that things at Bayan were sorta up in the air, so it is no surprise to me that it is taking this long, but still I am getting a little discouraged, and now that they have cancelled the San Diego tapings whos knows whats really going on

$300.00? I guess that depends on what tax bracket you fall under. Also, wanted to say that we checked over our contract and there isn't anything in our contract under #11 regarding taxation. We looked over everything and there isn't a thing in the entire contract. I am glad though that they are telling people upfront about it now. Unlike Dsrtshel, with our present financial situation we would not have opted to do the show. I will agree it was an incredible experience and we had a great time, but frankly we would have rather decorated the room the way we wanted and had an entertainment center built instead of the one they built for us that houses only a 27" TV and no storage for anything. They also painted over our wallpaper which is already showing signs of needing to have something done to it. Also most of the items they made or purchased are falling apart because they had to move so quickly. I do not mean to sound like the voice of gloom and doom, but it truly wasn't ALL good especially this tax issue.

You're right AZ. I had it all wrong. It is costing almost $1000.00 to be on the show. Not something we can afford either. Wow...future families really need to take this into consideration. It is no where on our contract either but I understood it as being an unknown issue until Discovery was contacted by the IRS. However, a major oversite for a production company.

$300 is not even remotely accurate to what the show will cost you in taxes. What you don't realize is that the $2800 1099 they sent you is considered "self-employment" income. That means you pay ALL the payroll taxes on the income that your employer would normally pay. If you are not already self employeed you have no idea how much money this means. It's a LOT. I currently fall in the 28% tax bracket (as most people do unless they have a lot of kids, or make very little or very very much). Anyway, because I'm self employeed I actually pay closer to 40% in taxes (before deductions). So, considering a 1099 of $2800 you can expect to pay close to $1300 in taxes. Now... you can take deductions if you had to spend money --- I would talk to a tax preparer (I am one, but I haven't read the rules in a few years) --- anyway, I bet you could deduct the cost of "fixing" the room after the crew left. Provided you do the "fixing" in the same year. You could probably quickly reduce the taxable amount to below the $600 limit. (If your 1099 is under $600, or $400 depending on circumstances, you are exempt from paying the "extra" taxes).

Anyway, it didn't sound like anyone on this forum really knew much about taxes, so I thought I'd fill you in. It MAY be worth the $100 to get your taxes professionally done in the year you do TS because it could save you quite a bit in SE taxes. Good luck!

Oooh... just another thought... you could also look into deducting the cost of the room as a home improvement. This usually cannot be done until you sell the house, but you MAY be able to take a Section 198 deduction (Like I said, it's been a while since I've done this, so talk to someone, or do some reading on irs.gov) Anyway, you may be able to take a deduction now, or depreciate it over the next 5 years -- helping to reduce the tax liability (the amount you pay). As soon as you receive a 1099 in the mail, you are considered a business in the eyes of the IRS ... this is a bad thing in tax dollars, but it opens many many doors in deductions. Did you use your car during the three days? Did you spend any money at all in order to receive the income??? etc.

Thanks for the info "Sprite." I also thought it was wrong of them to tax the husband $1600.00 and the wife $1600.00. I heard about writing off anything we did to fix the room, but as I think I mentioned before, my husband was out of work at the time and we didn't have the money to redo the room. I really didn't hate the room, but alot of the things they did were not practical for a family room. Like I said before, DSRTSHEL was right. It was a wonderful experience and the crew members were so much fun! I spoke with a CPA and he told me not to send the W-9 in. He said that if we did, we were basically giving them the O.K. to tax us. We may run into implications later, but he said to go ahead and claim the $1000 if it doesn't put us into another tax bracket. My opinion is that Banyan is suffering financial problems and want us to help them pick up the tab. I also think they got rid of Paige due to those financial problems. My feeling is that Trading Spaces is on its way out. I am glad we got to experience it though. Just my thoughts!

On another thread, someone posted about this 1099. They also said that they signed a disclosure stating something like they'd be sued up to $100,000 if they sold something that was made by TS.
What does that mean as far as built ins go? (Fireplace mantles, bookcases, etc.) What if you want to sell your house? How can you sell it without selling what's built in? Do you have to tell prospective buyers, "Well, you can buy the house, but we have to rip out the mantle so we don't get sued for 1/2 the value of the house. Sorry."
This is sounding less and less like a desirable experience to me.

Thank you MSPRITKE for the information you provided. It is very helpful and we will contact an accountant before filing.

That statement in the contract says that the stuff belongs to Banyan and we cannot sell it for profit, but yet we are paying taxes on stuff that isn't ours. That makes it even more ironic!!

We filmed our episode in March 2004. We just got our 1099's. What a shock! $1647 in my name and $1647 in my husband's name. I talked to Banyan and they said that it was for labor and materials. I told them that it was wrong for us to be in dark concerning anything over the $1000 we expected. We have to sign our lives away to be on the show. The lady at Banyan told me that the people who sign us all up for the show don't seem to make sure that we know all the details. I guess it's a live and learn issue.

[QUOTE]Originally posted by azbigham:
I spoke with a CPA and he told me not to send the W-9 in. He said that if we did, we were basically giving them the O.K. to tax us. We may run into implications later, but he said to go ahead and claim the $1000 if it doesn't put us into another tax bracket. [/QUOTE]

Well, if you didn't send in a W-9, you probably won't get a 1099. If you don't get one then you can report the $1000 (or $2800 if you want to be safe and legal) under the "other income" line --- this is NOT business income, and it will only cost you about $280 in taxes. If you have children, this will be even less due to child tax credits, etc. Whether it puts you in a new tax bracket or not you SHOULD report it... just because the IRS will know if they audit you that you posted to this board, and they will have proof that you knew you should have. Then you'll have penalties and all sorts of problems. Anyway... if you DO get a 1099, then you are stuck with the business problem, I talked about earlier.

In something completely different --- just to point out the far reaching arm of the IRS (for those of you who don't believe they'll find postings on this forum)... if you get audited, the IRS automatically does a blanket search of all casinos (Indian or otherwise) within a set mileage of your home to see if you've ever applied for one of those "reward cards"... they can subpoena the data and charge you taxes and penalties on every PENNY you've won. Nice folks those IRS people are!!! It is always safer to pay the couple hundred now, rather than have to pay that plus interest and penalties later.

Question for you, mspritke (and this may be a legal ? you can't answer):
We have not provided Banyan w/ our ss #'s. They are asking for it and my dh has it on his list of things to do to call and talk to them -- not necessarily give the #'s. The latest letter they sent says we can be fined $50 for providing false ss #'s. But, my ? to you, do you know if we *have* to provide it?

A further update. Our neighbors, who we traded with, actually heard back from Banyan. The amount we received on our 1099's represents the value of the designers/carpenter's time and is ADDED to the amount spent on the design of your room. Ex: if $1,000 is spent on your room and their time is worth $2,000 your 1099's will be for $1500 each. Two 1099's are issued in case you and your spouse file separately.

Shelly: Does that sound right?