Flacco’s sweet new ride, itself worth $60,000, will cost the 28-year-old $25,700 in income taxes. That’s according to K. Sean Packard, a certified public accountant who specializes in preparing tax returns for professional athletes. Writing in a guest post for Forbes, Packard explains:
“The tax implications of winning the automobile are simple if he keeps the car. Flacco will owe about $25,700 in income taxes.”
But a huge tax bill isn’t inevitable. Packard adds that, if the Joe Flacco Corvette were donated to charity, the quarterback would dodge a significant tax bullet. How much tax Flacco would owe in this scenario depends on how he donates the car to charity. Packard writes:
“There are two ways he could go about donating the car to charity. He could accept the car and give it to charity or direct Chevrolet to give the car to charity. It is a subtle distinction, but one that could have negative tax implications. If Flacco never takes the keys and directs Chevrolet to donate the car to charity, then the car never existed as far at Joe Flacco and the IRS are concerned.”
If Flacco took option two and directed Chevrolet to donate the high-performance car to charity, he would save a cool $6,900 in taxes.
Not that Joe Flacco cares much, I imagine. The quarterback, who threw three touchdowns with no interceptions in Sunday’s Super Bowl win over the 49ers, is a free agent and heading for a major payday before next season. Many pundits estimate Flacco could bag a $15 million salary.
If the Joe Flacco Corvette is donated to charity, Packard says the charity could increase the sale price by advertising the vehicle as the car Flacco won as Super Bowl MVP.
Chevrolet’s Corvette Stingray was unveiled in January at the Detroit Auto Show. The rear-wheel drive car features a new 6.2L LT1 V8 engine and is available with two types of transmission: a 7-speed manual or a 6-speed automatic with paddle shifters.
The video below shows the car in action:
What would you do in Joe Flacco’s shoes?