Gawker verdict6/22/2023 I’m speculating, but whatever Hogan's facts and numbers, the tax bite is probably bigger than you might assume. So, after paying lawyers and the IRS, Hogan’s take could be as small as $9.72 million on settling that whopping $140 million verdict. That means he is taxed on the whole $31 million–even the money paid to his lawyer–at the 28% AMT rate. Then, he might claim his $12.6 million of legal fees as a miscellaneous itemized deduction, which triggers the AMT. Actually, though, he probably would have to report the entire $31 million. You might assume that, at most, he would have $18.6 million to report to the IRS. Say his lawyer gets 40% or $12.4 million. Say Hulk Hogan settles his suit for $31 million. He may not be able to deduct his lawyers’ fees for purposes of the AMT. That means he is taxed on the whole $31 million–even the money paid to his lawyer–at the 28% AMT rate. Let’s assume Hogan is paying a 40% fee to his lawyer. When people talk of paying tax on money they never see, the AMT is often responsible. A miscellaneous itemized deduction triggers multiple tax traps, including the alternative minimum tax (AMT). That is not as good as a full-fledged business expense. Unless he can claim this suit relates to his business–which could be a stretch on these facts in this kind of case–his legal fees are probably a miscellaneous itemized deduction. So, if Hogan’s lawyer gets 40%, you might think he would collect the rest and just report that net amount to the IRS.Īctually, though, Hogan probably has to report it all as income, even the share his lawyer collects. That is presumably the $31 million, less his legal fees. In that case, you might assume that the most that Hogan could be taxed on is the amount he actually takes home. Hogan (whose real name is Terry Bollea) did not sue for physical injury damages, so he will have to pay taxes on his recovery. But if your recovery is taxable, watch out. In his closing argument, Hogan’s lawyer asked the jury, “Do you think the media can do whatever they want?” As it turns out, the answer is a resounding no.If the case is fully nontaxable (say an auto accident in which you are physically injured), that normally should not cause any tax problems. This man then secretly recorded a nude video of Andrews and publicly distributed it on the Internet. Andrews sued a hotel operator after it granted a man’s request to have a room next to Andrews. The Hogan verdict comes on the heels of former ESPN reporter Erin Andrews’ $55 million invasion of privacy verdict on March 7. In finding for Hogan, the jury rejected Gawker’s argument that the pro wrestler made his sex life a matter of public interest. The case began in October 2012 when Hogan filed a lawsuit alleging five counts: (1) invasion of privacy by intrusion upon seclusion, (2) publication of private facts, (3) violation of the Florida common law right of publicity, (4) intentional infliction of emotional distress, and (5) negligent infliction of emotional distress. However, Hogan’s lawyers pushed back against the notion that Gawker would be unable to pay the hefty verdict by noting that Gawker’s parent company is worth about $276 million and Gawker owner Nick Denton is estimated to be personally worth $121 million. The jury award is almost three times Gawker’s 2015 revenue. Gawker is expected to appeal the $140.1 million award and ask the judge to reduce the award. Daulerio, the Web content editor who posted the sex tape and drafted the accompanying post. On March 21, the jury tacked on an additional $25 million in punitive damages: $15 million against Gawker Media, $10 million for Gawker’s owner Nick Denton, and $100,000 against A.J. The jury awarded Hulk Hogan (real name: Terry Bollea) $115 million in compensatory damages after the gossip website Gawker published a sex tape of the famous wrestler and Heather Clem, the ex-wife of shock jock Bubba the Love Sponge Clem. On March 18, a Florida jury sent a message that the American public will not tolerate invasions of privacy.
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