In vision-language models (VLMs), the ability to perceive and interpret color and physical environment is crucial for achieving contextually accurate understanding and interaction. However, despite advances in multimodal modeling, there remains a significant lack of specialized datasets that rigorously evaluate a model's capacity to discern subtle color variations and spatial context -- critical elements for situational comprehension and reliable deployment across real-world applications. Toward that goal, we curate MegaCOIN, a high-quality, human-labeled dataset based on \emph{real} images with various contextual attributes. MegaCOIN consists of two parts: MegaCOIN-Instruct, which serves as a supervised fine-tuning (SFT) dataset for VLMs; and MegaCOIN-Bench, an annotated test set that can be used as a stand-alone QA dataset. MegaCOIN~provides three annotated features for 220,000 real images: foreground color, background color, and description of an object's physical environment, constituting 660k human annotations. In addition, MegaCOIN can be applied to benchmark domain generalization (DG) algorithms. We explore benchmarking DG methods in the linear probing setup for VLM and show some new insights. Last but not least, we show that VLMs, including GPT-4o, have subpar color recognition capabilities, and fine-tuning with MegaCOIN can result in improved performance on visual evaluation tasks. In certain cases, MegaCOIN fine-tuned small-scale opensource models such as LLaVA and Bunny can outperform closed-source GPT-4o. We hope the utilities of MegaCOIN can shed light on the directions VLMs can improve and provide a more complex platform for domain generalization algorithms.