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January 14

Taxes on game show prizes

It is my understanding that in the US, there are taxes on cash prizes. What about winning a trip, or a new car (or any other non-cash prize)? Do people have to pay taxes or other fees on their prizes? 173.35.158.194 (talk) 05:15, 14 January 2014 (UTC)[reply]

According to this the taxes are based on the fair market value of the item. And as the article says, it's up to the winner whether they want to pay the taxes and keep the item or sell the item to cover the taxes and have what's left in cash. Dismas|^(talk) 05:20, 14 January 2014 (UTC)[reply]

Or, as in my case, forfeit the prize (a trip to and week's stay at Miami Beach) and pay the furrin' guv'mint nothin'. As I recall, the prize wasn't transferable, so I couldn't sell it. Clarityfiend (talk) 09:09, 14 January 2014 (UTC)[reply]

Where did you win that ?

I think in some cases they put the retail value of a prize way above what you could sell it for, meaning your taxes could possibly be more than you get from selling it. When I watch game shows I'm amazed at how much they think people should pay for their crap. StuRat (talk) 02:38, 16 January 2014 (UTC)[reply]

I remember seeing a report on 60 Minutes many (add another many or two) years ago about this subject. One of the people shown had won a Rolls Royce - I think the fainted when it was announced. They never even got to drive it because they couldn't pay the taxes. MarnetteD | Talk 02:48, 16 January 2014 (UTC)[reply]

I was in Jeopardy of coughing up even more money than my traveling expenses. Clarityfiend (talk) 04:00, 16 January 2014 (UTC)[reply]

Nice one :-) Things like that can be so Punishing. MarnetteD | Talk 05:13, 16 January 2014 (UTC)[reply]

You guys should all migrate (legally, of course) to Australia. All lottery winnings, game show prizes etc here are tax free. -- Jack of Oz ^{[pleasantries]} 22:05, 16 January 2014 (UTC)[reply]

Not sure that's 100% true. Back in the 1970s a work colleague did the quiz show circuit in Australia, winning significant amounts of money in several of them. As I recall, the Tax Department deemed that he was treating this activity as an income earning one, and taxed him appropriately. A rare case though. Of course, the law may have changed since then too. HiLo48 (talk) 22:58, 16 January 2014 (UTC)[reply]

In at least some cases the organizers of the show will offer you the cash value (or even slightly more) of the prize. Partially to deal with these issues, and partially because they want to make the prizes really flashy and complicated for the sake of drama, but actually procuring the prize would be a pain. This is less likely on gameshows because often the prizes came cheap from the show's advertisers, but apparently it's quite common in sweepstakes. APL (talk) 00:09, 18 January 2014 (UTC)[reply]