The 94th Academy Awards are on Sunday, and while Hollywood A-listers pile into Los Angeles’ Dolby Theater in hopes of walking out with an Oscar statuette, 25 of the nominees will receive a gift bag worth just over $137,000.

The “Everybody Wins” gift bag is distributed by LA-based Distinctive Assets to the five nominees in each of the four acting categories and the nominees for “Best Director.” It’s a collection of gifts that includes everything from gold-infused olive oil to $10,000 worth of plastic surgery.

But if accepted, it can create a hefty tax burden for the recipients.

The gift bags are taxable because they are not actually “gifts” that were given “solely out of affection, respect or similar impulses for the recipients,” according to a dedicated page on the IRS’s website about gift bags given to members of the entertainment industry.

“If you think about it as ‘what is the intent of providing those items, products or services?’, obviously it’s the hope that the celebrity is going to use that product, go on that vacation,” Eric Bronnenkant, head of tax at Betterment, tells CNBC Make It. “They’re trying to influence behavior.”

The value of the gifts is counted as income on the recipients’ taxes. For high earners in California, like many Hollywood actors are, that can mean a tax rate over 50%, Bronnenkant says.

The Academy actually stopped giving out gift bags to presenters and performers in 2006 due to IRS scrutiny. “It seemed a little inappropriate to offer a gesture of thanks that then carried with it a [tax] obligation,” an Academy spokesperson told CNN in 2006.

Distinctive Assets, however, isn’t affiliated with the Academy and has been sending out gift bags for 20 years. Each of the recipients — which this year include Will Smith, Penelope Cruz and Olivia Colman — receive a form that founder Lash Fary crafted with a tax attorney explaining that business gifts are taxable and that they should consult their tax professional about it, Fary tells CNBC Make It.

Fary also points out that despite the eye-popping total value of everything included in the bag, the most valuable gifts need to be redeemed by the recipient and are not immediately taxable. 

“[Some articles] make it sound like I walk around with a briefcase full of $140,000 in cash and hand it to these nominees,” he says. “In fact, $5,000 of that $137,000 [value] is physical products that they can take out and put in their cupboard or re-gift to their mom or kid. The rest are invitations or offers that have no taxable consequence and no true value unless they redeem it.” 

This year, the most expensive offering is an all-expenses-paid trip to Turin Castle in Scotland. Guests who accept the offer will have full access to the 17th century castle, complete with butler service and a bagpiper welcome when they arrive. The value of the three-night stay is $50,000.

“Let’s say that Will Smith doesn’t go on the trip. His bag isn’t worth $137,000; it’s worth $137,000 minus $50,000,” Fary says. “If he doesn’t go to the Golden Door, that’s another $15,000 off. And if he doesn’t use the home renovation services from Maison Construction, that’s another $25,000 off.” 

Fary says that in the 20 years he has been giving gift baskets to Oscar nominees, no one has ever gotten the full value out of one.

“A lot of the trips have gotten redeemed, but no one has ever redeemed every single thing,” Fary says.

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