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#32
12-31-2004, 03:27 PM
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 Re: Tax on Winning Car - quote - > > Could be all rather moot, as a pageant awarding a car as
The basis for such an allegation may be rather questionable.> > prize probably isn't a 501(c)(3) organization. Maybe a > > (c)(4), I think. > Hey Fred! you should know. (grin) > and Happy New ChEAr$ to you, too. > Harlan Lunsford :-) But as much a minimal feminist as may be plausible for a male to be, I don't think beauty pageants deserve even (c)(4) status....but what do I know! CY 2005 Cheers to you also, Harlan. Fred F. << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#31
12-29-2004, 01:50 PM
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| Re: Tax on Winning Car Frederick Jorden wrote: - quote - > Harlan Lunsford wrote:
Why? BECAUSE. It's a contribution and not a reduction of> > Frederick Jorden wrote: > > > Cost of sales is a lot better than a contribution for a > > > corporation. > > Correct! But wrong, of course.  > Why? cost of sales. For it to be that, he would have had to junked the car, or rather have had some legitimate reason to write the value down. A proprietor falls under same acounting strictures. If I have a proprietor with a car lot and he contributes car to local . whatever.... cost ... cost not fmv... comes out of inventory and is transferred to contributions which wind up on his schedule a, IF he itemizes deductions. Happy New ChEAr$, Harlan Lunsford << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#30
12-29-2004, 01:50 PM
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| Re: Tax on Winning Car - quote - > > > Cost of sales is a lot better than a contribution for a
Hey Fred! you should know. (grin> > > corporation. > > Correct! But wrong, of course. > Could be all rather moot, as a pageant awarding a car as > prize probably isn't a 501(c)(3) organization. Maybe a > (c)(4), I think. So, it may not be a contribution, just > plain old advertising! and Happy New ChEAr$ to you, too. Harlan Lunsford << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#29
12-28-2004, 07:41 PM
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| Re: Tax on Winning Car - quote - > > Cost of sales is a lot better than a contribution for a
Could be all rather moot, as a pageant awarding a car as> > corporation. > Correct! But wrong, of course. prize probably isn't a 501(c)(3) organization. Maybe a (c)(4), I think. So, it may not be a contribution, just plain old advertising! Happy Holidays, Fred F. << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#28
12-28-2004, 07:02 PM
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| Re: Tax on Winning Car Harlan Lunsford wrote: - quote - > Frederick Jorden wrote:
Why?> > Cost of sales is a lot better than a contribution for a > > corporation. > Correct! But wrong, of course. -- Frederick E. Jorden http://Tax-Accounting-Payroll.com 7825 Midlothian Tpk - 207 Richmond, VA 23235-5247 EMAIL knowtax[at]bigfoot.com (804) 320-6210 FAX (804) 320-6211 << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#27
12-23-2004, 04:25 AM
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| Re: Tax on Winning Car "A.G. Kalman" <glendale202-mtm[at]yahoo.com> wrote: - quote - > I can't remember where I read that the producers of the
The cars were worth about $28,000, so the income tax would> Oprah show treated the autos as taxable prizes and gave each > member of the audience $2500 (I think that was the amount.) > to help pay the tax. The $2500 itself was also taxable. be around $7,000. You may be thinking of the fact that Oprah paid the *sales* tax for the cars. -- Barry Margolin, barmar[at]alum.mit.edu Arlington, MA << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#26
12-23-2004, 04:06 AM
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| Re: Tax on Winning Car - quote - > > > > A friend of mine just won a brand new car by winning a
That 2500$ came about because of sales taxes due on the> > > > beauty pageant. The car is actually sponsored by a local car > > > > dealership. When it's time to pick up the car, it wasn't > > > > the pageant officials who did the transferred paperwork. > > > > She actually went to the dealership and fill out the > > > > paperwork. She actually went through the process of buying > > > > the car (loan contracted, insurance, etc..) but did not have > > > > to pay for the actual value of the car. The only fee she > > > > paid was sale tax and registration fee. My question is: > > > > since she paid sales tax on this car, does she have to pay > > > > income tax at the end of the year for this car? > > > When you win a prize, you have to pay income tax on the > > > value of the prize. Of course she didn't have to pay for > > > the car herself -- if she did, it wouldn't have been a > > > prize! > > > > > Don't you remember the brouhaha a few months ago when Oprah > > > gave a new car to everyone in her audience? It was a big > > > deal because they all owed income tax on the cars, but most > > > of them were poor people who wouldn't be able to afford the > > > huge tax bills that would be incurred, so they probably had > > > to sell the cars. > > I would have called that a GIFT. The audience did nothing > > (i.e. no competition) to "win" anything, nor did they know, > > prior to the show, that any such thing would happen. > > > I don't see income tax here. I see a big gift tax for Oprah. > I can't remember where I read that the producers of the > Oprah show treated the autos as taxable prizes and gave each > member of the audience $2500 (I think that was the amount.) > to help pay the tax. The $2500 itself was also taxable. cars. Whether that 2500 was the actual sales tax in the particular state where each "won" the car, I don't know. But that was the first hit to hit the fan. Merry Christmas, Harlan Lunsford, EA n LA << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#25
12-23-2004, 04:06 AM
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| Re: Tax on Winning Car Frederick Jorden wrote: - quote - > Cost of sales is a lot better than a contribution for a
Correct! But wrong, of course. > corporation. Merry Christmas, Y'all Harlan Lunsford << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#24
12-22-2004, 03:28 PM
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| Re: Tax on Winning Car D. Stussy <kd6lvw[at]kd6lvw.ampr.org> wrote: - quote - > I would have called that a GIFT. The audience did nothing
But look at all the publicity Oprah got as a result of doing> (i.e. no competition) to "win" anything, nor did they know, > prior to the show, that any such thing would happen. > I don't see income tax here. I see a big gift tax for Oprah. it. Doesn't that make it a deductible expense? Seth << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#23
12-22-2004, 03:09 PM
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| Re: Tax on Winning Car - quote - > > > A friend of mine just won a brand new car by winning a
Except that "Oprah" is probably Ophrah's corporate> > > beauty pageant. The car is actually sponsored by a local car > > > dealership. When it's time to pick up the car, it wasn't > > > the pageant officials who did the transferred paperwork. > > > She actually went to the dealership and fill out the > > > paperwork. She actually went through the process of buying > > > the car (loan contracted, insurance, etc..) but did not have > > > to pay for the actual value of the car. The only fee she > > > paid was sale tax and registration fee. My question is: > > > since she paid sales tax on this car, does she have to pay > > > income tax at the end of the year for this car? > > When you win a prize, you have to pay income tax on the > > value of the prize. Of course she didn't have to pay for > > the car herself -- if she did, it wouldn't have been a > > prize! > > > Don't you remember the brouhaha a few months ago when Oprah > > gave a new car to everyone in her audience? It was a big > > deal because they all owed income tax on the cars, but most > > of them were poor people who wouldn't be able to afford the > > huge tax bills that would be incurred, so they probably had > > to sell the cars. > I would have called that a GIFT. The audience did nothing > (i.e. no competition) to "win" anything, nor did they know, > prior to the show, that any such thing would happen. > I don't see income tax here. I see a big gift tax for Oprah. production company to which gifts are limited to 25$ apiece, whereas prizes are fully deductible, no? Merry Christmas! Harlan Lunsford Mon, 20 Dec 2004 21:32:02 << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#22
12-22-2004, 02:50 PM
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| Re: Tax on Winning Car - quote - > > > A friend of mine just won a brand new car by winning a
And you'd be wrong.> > > beauty pageant. The car is actually sponsored by a local car > > > dealership. When it's time to pick up the car, it wasn't > > > the pageant officials who did the transferred paperwork. > > > She actually went to the dealership and fill out the > > > paperwork. She actually went through the process of buying > > > the car (loan contracted, insurance, etc..) but did not have > > > to pay for the actual value of the car. The only fee she > > > paid was sale tax and registration fee. My question is: > > > since she paid sales tax on this car, does she have to pay > > > income tax at the end of the year for this car? > > When you win a prize, you have to pay income tax on the > > value of the prize. Of course she didn't have to pay for > > the car herself -- if she did, it wouldn't have been a > > prize! > > > Don't you remember the brouhaha a few months ago when Oprah > > gave a new car to everyone in her audience? It was a big > > deal because they all owed income tax on the cars, but most > > of them were poor people who wouldn't be able to afford the > > huge tax bills that would be incurred, so they probably had > > to sell the cars. > I would have called that a GIFT. The audience did nothing > (i.e. no competition) to "win" anything, nor did they know, > prior to the show, that any such thing would happen. > I don't see income tax here. I see a big gift tax for Oprah. 1) Oprah didn't give away the vehicles, Pontiac did. 2) There is existing case law which would equate winning that car with winning a door prize. -- David M. Woods, EA, ChFC, CLU Woods Financial Services Norwood, MA 02062 www.woods-financial.com << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#21
12-22-2004, 02:12 PM
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| Re: Tax on Winning Car Harlan Lunsford wrote: - quote - > Seth Breidbart wrote:
Cost of sales is a lot better than a contribution for a> > Rich Carreiro <rlcarr[at]animato.arlington.ma.us> wrote: > > > The dealership will no doubt inflate the price of the car > > > (thus getting a bigger write-off for themselves) which will > > > hurt your friend. > > How does that work? Wouldn't the write-off be the cost? > I'll venture to say, no write off, since it would be the > cost. And that cost will probably "disappear" within > inventory end of year. Some corporations wouldn't want to > waste part of their charitable contribution % making the > transfer from purchases to contributions. corporation. -- Frederick E. Jorden http://Tax-Accounting-Payroll.com 7825 Midlothian Tpk - 207 Richmond, VA 23235-5247 EMAIL knowtax[at]bigfoot.com (804) 320-6210 FAX (804) 320-6211 << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#20
12-22-2004, 02:12 PM
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| Re: Tax on Winning Car - quote - > > > A friend of mine just won a brand new car by winning a
I can't remember where I read that the producers of the> > > beauty pageant. The car is actually sponsored by a local car > > > dealership. When it's time to pick up the car, it wasn't > > > the pageant officials who did the transferred paperwork. > > > She actually went to the dealership and fill out the > > > paperwork. She actually went through the process of buying > > > the car (loan contracted, insurance, etc..) but did not have > > > to pay for the actual value of the car. The only fee she > > > paid was sale tax and registration fee. My question is: > > > since she paid sales tax on this car, does she have to pay > > > income tax at the end of the year for this car? > > When you win a prize, you have to pay income tax on the > > value of the prize. Of course she didn't have to pay for > > the car herself -- if she did, it wouldn't have been a > > prize! > > > Don't you remember the brouhaha a few months ago when Oprah > > gave a new car to everyone in her audience? It was a big > > deal because they all owed income tax on the cars, but most > > of them were poor people who wouldn't be able to afford the > > huge tax bills that would be incurred, so they probably had > > to sell the cars. > I would have called that a GIFT. The audience did nothing > (i.e. no competition) to "win" anything, nor did they know, > prior to the show, that any such thing would happen. > I don't see income tax here. I see a big gift tax for Oprah. Oprah show treated the autos as taxable prizes and gave each member of the audience $2500 (I think that was the amount.) to help pay the tax. The $2500 itself was also taxable. -- Alan http://taxtopics.net << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#19
12-22-2004, 01:53 PM
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| Re: Tax on Winning Car - quote - > > Don't you remember the brouhaha a few months ago when
This is all guesswork, because we don't know the details of> > Oprah gave a new car to everyone in her audience? > ... > I would have called that a GIFT. The audience did nothing > (i.e. no competition) to "win" anything, nor did they know, > prior to the show, that any such thing would happen. > I don't see income tax here. I see a big gift tax for Oprah. the arrangement. "Oprah" could easily be a corporation, not subject to the gift tax, but neither she nor a corp need have made the transfer. It likely was directly from G.M. or one of its dealers for the paperwork. Had the cars first went to "Oprah," and then awarded, there would be merely offsetting income/deduction. G.M. is a corp. I understand the legal definition of a gift to be one person helping another person(s) for heart-warming reasons. A corp is not a natural person, so it cannot do that. Charities which are corporations don't make gifts in the strict sense either, but rather are structured to redistribute donor money (gift intent) to people, and hence state and tax laws to make sure they do only that. That's not true of GM shareholders or purchasers of their vehicles. The audience participants did do something, they showed up. When a "door prize" is awarded to a person at a gathering, it's income, with no intent of true gift. G.M. wouldn't really care if the audience members actually were screened so as to be people in greater need. It's advertising value is roughly same no matter who they are. If they were so screened, that redounds to Oprah's benefit image-wise more than GMs. But an article in the St. Louis Post-Dispatch says that only 57 of the 276 recipients may have actually been needy. Reg, Fred F. << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#18
12-22-2004, 01:33 PM
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| Re: Tax on Winning Car - quote - > > > A friend of mine just won a brand new car by winning a
I don't know the legal background, but it was all over the> > > beauty pageant. The car is actually sponsored by a local car > > > dealership. When it's time to pick up the car, it wasn't > > > the pageant officials who did the transferred paperwork. > > > She actually went to the dealership and fill out the > > > paperwork. She actually went through the process of buying > > > the car (loan contracted, insurance, etc..) but did not have > > > to pay for the actual value of the car. The only fee she > > > paid was sale tax and registration fee. My question is: > > > since she paid sales tax on this car, does she have to pay > > > income tax at the end of the year for this car? > > When you win a prize, you have to pay income tax on the > > value of the prize. Of course she didn't have to pay for > > the car herself -- if she did, it wouldn't have been a > > prize! > > > Don't you remember the brouhaha a few months ago when Oprah > > gave a new car to everyone in her audience? It was a big > > deal because they all owed income tax on the cars, but most > > of them were poor people who wouldn't be able to afford the > > huge tax bills that would be incurred, so they probably had > > to sell the cars. > I would have called that a GIFT. The audience did nothing > (i.e. no competition) to "win" anything, nor did they know, > prior to the show, that any such thing would happen. news at the time that these cars were taxable income to the recipients. Perhaps the "competition" is the lottery for choosing which of the people who requested tickets actually received them. -- Barry Margolin, barmar[at]alum.mit.edu Arlington, MA << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#17
12-21-2004, 12:45 AM
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| Re: Tax on Winning Car You probably want to figure FMV by researching news auto ads in her locality for the month she won. Those would probably be lower than the sales tax basis or Blue Book. << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#16
12-21-2004, 12:07 AM
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| Re: Tax on Winning Car MTW wrote: - quote - > Rich Carreiro wrote:
A bit of "PR" value to be sure, but SOMEhow, they'll do it.> > The dealership will no doubt inflate the price of the car > > (thus getting a bigger write-off for themselves) which will > > hurt your friend. > I'm not sure that the dealership will get a deduction of > greater than cost/basis in any event. However, they WILL get > a certain amount of "PR" value based on the apparent size of > the prize. As Fred F says: "IOW, how to give "invoice" to the pageant and still make money." Merry Christmas, Y'all! Harlan Lunsford Mon, 20 Dec 2004 08:54:55 << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#15
12-21-2004, 12:07 AM
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| Re: Tax on Winning Car Seth Breidbart wrote: - quote - > Rich Carreiro <rlcarr[at]animato.arlington.ma.us> wrote:
I'll venture to say, no write off, since it would be the> > The dealership will no doubt inflate the price of the car > > (thus getting a bigger write-off for themselves) which will > > hurt your friend. > How does that work? Wouldn't the write-off be the cost? cost. And that cost will probably "disappear" within inventory end of year. Some corporations wouldn't want to waste part of their charitable contribution % making the transfer from purchases to contributions. Merry Christmas! Harlan Lunsford Mon, 20 Dec 2004 08:56 << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#14
12-20-2004, 11:48 PM
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| Re: Tax on Winning Car - quote - > > A friend of mine just won a brand new car by winning a
I would have called that a GIFT. The audience did nothing> > beauty pageant. The car is actually sponsored by a local car > > dealership. When it's time to pick up the car, it wasn't > > the pageant officials who did the transferred paperwork. > > She actually went to the dealership and fill out the > > paperwork. She actually went through the process of buying > > the car (loan contracted, insurance, etc..) but did not have > > to pay for the actual value of the car. The only fee she > > paid was sale tax and registration fee. My question is: > > since she paid sales tax on this car, does she have to pay > > income tax at the end of the year for this car? > When you win a prize, you have to pay income tax on the > value of the prize. Of course she didn't have to pay for > the car herself -- if she did, it wouldn't have been a > prize! > Don't you remember the brouhaha a few months ago when Oprah > gave a new car to everyone in her audience? It was a big > deal because they all owed income tax on the cars, but most > of them were poor people who wouldn't be able to afford the > huge tax bills that would be incurred, so they probably had > to sell the cars. (i.e. no competition) to "win" anything, nor did they know, prior to the show, that any such thing would happen. I don't see income tax here. I see a big gift tax for Oprah. << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#13
12-20-2004, 10:07 AM
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| Re: Tax on Winning Car Barry Margolin wrote: - quote - > Don't you remember the brouhaha a few months ago when Oprah
Interesting you should mention that, cause just the other> gave a new car to everyone in her audience? It was a big > deal because they all owed income tax on the cars, but most > of them were poor people who wouldn't be able to afford the > huge tax bills that would be incurred, so they probably had > to sell the cars. day was a piece in the paper about a teacher who was selected to be one of Oprah's audience a particular day when she was honoring teachers. And the article went on to say how all the audience members were the recipients of gifts. Nowhere in the article was it mentioned these goodies were prizes, nor that they would be income taxable. I'm wondering now, if "they" somehow changed the whole tenor of the situation to reflect "gifts" instead of "awards". But of course if they were bona fide "gifts", then the show couldn't deduct the costs of them. Unless they were donated by sponsors.... oh shucks! ChEAr$, Harlan Lunsford, EA n LA << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
| Tags |
| car, tax, winning |
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