It Was a Very Good Year
America has always been a land of opportunity, and there are many paths to fame and fortune. If you’re physically gifted, consider professional sports. If you’re blessed with good looks, Hollywood beckons. If you’re born with the gift of gab, consider used cars (or politics). And if you’re just plain brilliant, Silicon Valley begs for your tech unicorn.
But what if you don’t have physical gifts, good looks, charm, or intelligence? Don’t give up hope! You can be completely devoid of any redeeming qualities at all and still grab headlines through the awesome power of reality TV. And so it’s only fitting that we close out 2020 with a story ripped from that collection of freaks, grotesques, and half-wits. Best of all, there’s even a hidden tax angle!
Since 2009, the Real Housewives of New Jersey have been hard at work repairing the damage those Jersey Shore knuckleheads did to the Garden State’s reputation. Sadly, not all of those housewives and their posses have upheld that sacred duty. In 2012, cast member Dina Manzo left her husband, Tommy. And while some jilted husbands accept their fate with dignity and grace, Tommy did not.
Most men in Tommy’s situation would content themselves with therapy, or maybe some creepy Facebook stalking. But Tommy wanted more. So he reached out to an associate named John Perna, a “made man” in an organization called “the Lucchese Family.” (Think of it as an Italian-American social club, or maybe a mutual-aid society.) The two men decided to swap favors. Perna would beat the snot out of Dina’s new boyfriend. In exchange, Tommy would host a lavish wedding reception at the restaurant he owned, for a fraction of the usual price.
Perna probably fancies himself a thoroughly discreet, “professional” hit man. But a high-profile beating involving a popular reality-TV show was bound to attract attention. And so, in July, FBI agents indicted Tommy and Perna on the usual laundry list of charges you might expect. Earlier this month, Perna pleaded guilty to committing a violent crime in aid of racketeering activity. He’s facing up to 20 years in prison and $250,000 in fines when he’s sentenced on April 28. (Count Perna as one guy who doesn’t get to say “at least 2021 is going to be better.”)
What does any of this have to do with taxes? Well, Perna contracted to do a job (the beating) in exchange for payment (the discounted reception). And while that payment didn’t come in the form of cash, it’s taxable just as if it had. We’re probably safe assuming Tommy didn’t issue the appropriate 1099-MISC, and Perna certainly “forgot” to report the discount on his 1040. But it’s easy enough to calculate the taxable amount involved here — it’s the discount Tommy gave Perna.
Now, if this had been a strictly business transaction — say, an attorney trading professional services with a publicist — both parties would enjoy offsetting deductions, with no actual tax due. Sadly for Tommy, hiring a goon to beat up your ex’s new squeeze is a nondeductible personal expense.
2020 has brought us a whole new set of challenges that few of us were prepared to meet. But we made it through, battered as we may be. So this New Year’s Eve, raise a toast to a better future, or just go to bed early for some much-needed peace and quiet. We’ll be here in 2021 to help you accomplish your business and financial goals with the least interference from taxes possible! Be sure to contact us for 2021 Tax Planning!