By People Staff
September 04, 2006 12:00 PM

For Breaking Celebrity News Every Day people.com

SAFE DISTANCE

While Kate Hudson spends time with family, Owen Wilson hits the London premiere of You, Me and Dupree alone—worlds apart, but, says a pal, “smitten”

For Owen Wilson, the Aug. 22 London premiere of You, Me and Dupree was more like you, me and no Kate Hudson in sight. Where was his co-star? Home in L.A., where she was photographed Aug. 20 with estranged husband Chris Robinson, 39, and their son Ryder, 2. Hudson, 27, had originally planned to go, says a close source, but backed out after the split was announced Aug. 14. An ocean is certainly bigger than the several feet Brad Pitt and Angelina Jolie always kept between them while promoting their film Mr. & Mrs. Smith—but evidence linking Hudson and Wilson, 37, continues to mount. The pair, who have been seen recently with friends at L.A. hot spots Hyde Lounge and Tropicana Bar, “are smitten with each other,” says a source who knows both actors. Hudson’s rep had no comment; Wilson’s rep called reports of a romance “all … untrue.” (Hudson and Robinson told PEOPLE in a joint statement that “our reasons for separating have nothing to do with any third party.”) Still, some friends are pulling for a love match. “[When Kate and Owen met] it was perfect timing,” says a pal of Hudson’s. “She was ripe for some real companionship and fun. They are comedians and have a naturally upbeat view of life, which Chris did not have. She’s a free spirit. And Owen is also a free bird.”

WAR OF WORDS

Somebody cover Suri’s ears: The mudslinging gets thick as Tom Cruise and Paramount cut ties

The biggest breakup in Hollywood last week? Tom Cruise‘s split from Paramount Pictures, the studio that has backed his production company for 14 years. What might have been a quiet parting of ways turned into a nasty public spat when Sumner Redstone—chairman of Paramount parent Viacom Inc.—spoke bluntly about the rift, including comments alluding to the actor’s infamous couch-jumping and anti-psychiatry remarks, which some industry watchers blame for the below-expected box office on this summer’s M:I:III. “As much as we like him personally, we thought it was wrong to renew his deal,” Redstone told the Wall Street Journal. “His recent conduct has not been acceptable to Paramount.”

Cruise’s production partner Paula Wagner fired back, telling PEOPLE that Redstone’s comments were “undignified, outrageous and untrue.” She said she and Cruise would set up their own Wall Street-financed operation. Says Variety editor-in-chief Peter Bart: “[The split] is a challenge for [Tom] to get on with his career … it’s like a call to arms for him.”

THE NUMBERS

Cruise’s M:I:III (estimated) worldwide grosses showed a drop.

Mission: Impossible II (2000)

$546 Million

War of the Worlds (2005)

$591 Million

Mission: Impossible III (2006)

$329 Million

30-SECOND POLLS: What’s on Your Mind?

WHOM SHOULD PAUL MCCARTNEY DATE NEXT?

Blythe Danner 70% (Her daughter Gwyneth and his Stella are BFFs)

Sienna Miller 6% (Hey Jude, indeed)

Kate Hudson 10% (She likes older rockers)

Yoko Ono 14% (No explanation needed)

WILL ROSIE O’DONNELL (SEE BELOW) BE A TEAM PLAYER ON THE VIEW?

YES, SHE’LL FIT RIGHT IN 37%

NO, SHE’LL HOG THE SPOTLIGHT 63%

Will you buy Kevin Federline‘s debut CD, Playing with Fire?

Yes 5%

No 95%

WHICH ALBUM ARE YOU LOOKING FORWARD TO THE MOST?

Christina Aguilera‘s Back to Basics 47%

Beyoncé Knowles‘s B-Day 22%

Janet Jackson‘s 20 Years Old 15%

Jessica Simpson‘s A Public Affair 15%

Who would you want as your partner on Dancing With the Stars?

Tucker Carlson 5%

Harry Hamlin 14%

Joe Lawrence 28%

Mario Lopez 40%

Emmitt Smith 8%

Jerry Springer 6%

Murphy: Single Again

Brittany Murphy and her film-grip fiancé, Joe Macaluso, have ended their engagement, her rep tells PEOPLE. “They just decided it wouldn’t work,” says a source close to the actress, 28 (who was previously engaged to her manager Jeff Kwatinetz). “Breaking up is always painful … but she’s doing okay.”

Rosie’s Web Site Waffle

What a difference a day makes. Apparently unimpressed with promos for The View‘s upcoming season, Rosie O’Donnell—who joins the cast Sept. 5—wrote on her blog Aug. 17, “it will be hard 4 me/2 not b/the boss.” (She also said that she “loathe[d]” feeling “powerless.”) But the next day O’Donnell, 44, went back to the blog with a rosier View: “there is nothing better/then [sic] being a cast member.” She continued to back-track Aug. 21, posting “I love [the promos]/hope u do 2/fun was had by all that day/and it shows.” Did O’Donnell think better of picking a fight with show creator Barbara Walters? The View had no comment, but O’Donnell’s rep says no: “She didn’t like the way the promos were edited, but it has been fixed. She loves Barbara and Barbara loves her back.”

FREE, REINED

SWAG IS A CELEBRITY BIRTHRIGHT, BUT NOW THE IRS WANTS ITS CUT. WILL IT DESTROY THE MARKET FOR FAB FREEBIES?

Stars, beware: The tax man is coming for your goody bag—and you could be in hot water if you don’t list the loot on your form next April 15. Cracking down on the multimillion-dollar practice of gifting celebs with everything from jeans and jeweled cell phones to Lasik eye surgery and luxury vacations, the Internal Revenue Service issued a statement warning that “There’s no special red carpet tax loophole.”

That means any celebrity who accepts any gift basket or free merchandise must tally “the fair market value of the [products and] … report that amount on his or her federal income tax return.” The agency has set no penalties for noncompliance. But both the Academy of Motion Picture Arts and Sciences (Oscars) and the Academy of Television Arts and Sciences (Emmys) are taking it seriously. The Oscar folks paid an undisclosed sum to the IRS for previous years’ gift baskets and are considering doing away with the practice altogether. And this year, Emmy organizers will give presenters their $30,000 gift baskets only if they sign a form that explains the tax law. Some of the unofficial swag suites that set up shop at hotels around L.A. during award shows will hand out 1099 forms with the items and provide the fair market value of each.

“Obviously, it’s not my job to tax them,” says Gavin Keilly, president of the L.A.-based GBK Productions events company (who estimates that celebs each snagged about $45,000 to $50,000 in freebies at his suite last year). “It’s really up to them to declare anything they want to.” The world of swag may not change much, says Karen Wood, president of Backstage Creations. “Celebs will still visit the gift retreats, but they may be more selective in the suites they choose to attend.” Will they actually fess up come April 15? Only time will tell—and VIPs can keep track of that on free Swarovski-studded watches.

7 DAYS OF SWAG

A celeb who hit just one Emmy swag fest a day could score goodies including:

MONDAY

Skincare treatments, spa products and a LASIK gift certificate

Sonya Dakar Emmy Beauty Boot Camp

$10,000

TUESDAY

Diamond massages, martinis, jewelry and Godiva chocolates

Hearts on Fire Diamond indulgence

$7,500

WEDNESDAY

Gadgets (like this $3,500 gold-plated Nokia phone)

GBK Productions

$35,000

THURSDAY

Chi-Chi Couture dog treats (left), two-day vacations and wine

Extra! Suite

$16,795

FRIDAY

Clothes and jewelry (including Corinna Gordon beads)

Keri Feinstein Lounge

$13,500

SATURDAY

iPod Nanos, DVD players, beauty items

Platinum Guild

$45,000

SUNDAY

Pearl Paradise necklace, dinner for six and Dove candies

Official Emmy Bag

$30,000

GRAND TOTAL FOR THE WEEK: $157,795

Trash Talkin’ Timberlake

With his album Future Sex/Love Sounds nearing release, Justin Timberlake, 25, has been making the press rounds and, in the process, taking jabs at Britney Spears, rapper Kanye West and even a certain American Idol. On the other hand, he’s got no beef with Kate Moss.

I remember the first time it was reported that I smoked pot. I was like, “Y’all don’t?” That’s why I sort of respect Kate Moss.

I dated Britney half my life, but I don’t know that person anymore…. If I was writing an article about her, I would not be able to fight the urge to write every dirty thing about her.

Kanye? Has he ever had a song that wasn’t already a song before he did it? That’s a joke, okay? Please tell me you know that was a joke.

People think [Taylor Hicks] looks so normal, and he’s so sweet, and he’s so earnest, but he can’t carry a tune in a bucket.

ON THE BLOCK

LINDSAY’S LUXE DIGS

PRICE: $2.85 million

PLACE: West Hollywood, Calif.

Sometimes fast-moving Lindsay Lohan doesn’t even leave footprints. In 2005, the actress paid $1.9 million for a 2,100-sq.-ft., three-bedroom condo in Sierra Towers, just off the Sunset Strip. Now she’s selling the place—without ever moving in. (Lately she’s been bunking at the Chateau Marmont.) The big question now: From whom will ex-neighbors Cher and Matthew Perry borrow sugar?

For more poll questions, visit People.com

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