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Jarkat2002
July 16th 03, 05:24 PM
>The local radio station has a contest and the prize is a $5000 watch. Of
>course the winner pays the taxes which I figure would be around $1500. If
>you win the prize, and sell it would you be in the hole? I figure the $5000
>is retail, and the wholesale might be as little as a $1000. Any thoughts?
>
>Tom
>
>
>

IME you pay sales tax on a prize. How did you work it out to make the tax
$1500?
~Kat


Planet Claire has pink air
All the trees are red
No one ever dies there
No one has a head

George
July 16th 03, 07:03 PM
"mary" > wrote in message
...
> The local radio station has a contest and the prize is a $5000 watch. Of
> course the winner pays the taxes which I figure would be around $1500. If
> you win the prize, and sell it would you be in the hole? I figure the
$5000
> is retail, and the wholesale might be as little as a $1000. Any thoughts?
>
> Tom
>
I know a few people who have won stuff and they received a 1099-misc with
the list price of the item. So you must pay income tax on the listed value.
And as you stated you could easily be in a position where you would get less
than the tax liability if you sold the item.

George
July 16th 03, 07:03 PM
"mary" > wrote in message
...
> The local radio station has a contest and the prize is a $5000 watch. Of
> course the winner pays the taxes which I figure would be around $1500. If
> you win the prize, and sell it would you be in the hole? I figure the
$5000
> is retail, and the wholesale might be as little as a $1000. Any thoughts?
>
> Tom
>
I know a few people who have won stuff and they received a 1099-misc with
the list price of the item. So you must pay income tax on the listed value.
And as you stated you could easily be in a position where you would get less
than the tax liability if you sold the item.

Tomcat14
July 16th 03, 08:18 PM
"mary" > wrote in message >...
> The local radio station has a contest and the prize is a $5000 watch. Of
> course the winner pays the taxes which I figure would be around $1500. If
> you win the prize, and sell it would you be in the hole? I figure the $5000
> is retail, and the wholesale might be as little as a $1000. Any thoughts?
>
> Tom

If what you say is right then it's not a $5,000 watch. It's more like
$1,000 plus what you could deal it for. If you are serious and wanted
to pursue this I think there is an IRS precedent, ruling, or statement
somewhere that allows you to immediately market the item and pay the
gain based upon that. But I'm not sure and there are, no doubt,
technicalities on how to do it. That concept almost seems too fair to
allow. I hope someone posts a definitive statement on this with a
chapter citing.

Tomcat14
July 16th 03, 08:18 PM
"mary" > wrote in message >...
> The local radio station has a contest and the prize is a $5000 watch. Of
> course the winner pays the taxes which I figure would be around $1500. If
> you win the prize, and sell it would you be in the hole? I figure the $5000
> is retail, and the wholesale might be as little as a $1000. Any thoughts?
>
> Tom

If what you say is right then it's not a $5,000 watch. It's more like
$1,000 plus what you could deal it for. If you are serious and wanted
to pursue this I think there is an IRS precedent, ruling, or statement
somewhere that allows you to immediately market the item and pay the
gain based upon that. But I'm not sure and there are, no doubt,
technicalities on how to do it. That concept almost seems too fair to
allow. I hope someone posts a definitive statement on this with a
chapter citing.

The Real Bev
July 16th 03, 09:58 PM
George wrote:
>
> "mary" > wrote:
>
> > The local radio station has a contest and the prize is a $5000 watch. Of
> > course the winner pays the taxes which I figure would be around $1500. If
> > you win the prize, and sell it would you be in the hole? I figure the
> > $5000
> > is retail, and the wholesale might be as little as a $1000. Any thoughts?
> >
> I know a few people who have won stuff and they received a 1099-misc with
> the list price of the item. So you must pay income tax on the listed value.
> And as you stated you could easily be in a position where you would get less
> than the tax liability if you sold the item.

So the moral of the story is "Don't enter a contest unless you're willing
to buy the prize at the price of the required taxes." There's almost
nothing I'm willing to pay that much for since I can buy it for less than
10 cents on the dollar at yard sales with no tax liability whatsoever.

--
Cheers, Bev
+++++++++++++++++++++++++++++++++++++++++++++++++
"I don't care who your father is! Drop that cross
one more time and you're out of the parade!"

The Real Bev
July 16th 03, 09:58 PM
George wrote:
>
> "mary" > wrote:
>
> > The local radio station has a contest and the prize is a $5000 watch. Of
> > course the winner pays the taxes which I figure would be around $1500. If
> > you win the prize, and sell it would you be in the hole? I figure the
> > $5000
> > is retail, and the wholesale might be as little as a $1000. Any thoughts?
> >
> I know a few people who have won stuff and they received a 1099-misc with
> the list price of the item. So you must pay income tax on the listed value.
> And as you stated you could easily be in a position where you would get less
> than the tax liability if you sold the item.

So the moral of the story is "Don't enter a contest unless you're willing
to buy the prize at the price of the required taxes." There's almost
nothing I'm willing to pay that much for since I can buy it for less than
10 cents on the dollar at yard sales with no tax liability whatsoever.

--
Cheers, Bev
+++++++++++++++++++++++++++++++++++++++++++++++++
"I don't care who your father is! Drop that cross
one more time and you're out of the parade!"

Michael Black
July 16th 03, 10:35 PM
The Real Bev ) writes:
> George wrote:
>>
>> "mary" > wrote:
>>
>> > The local radio station has a contest and the prize is a $5000 watch. Of
>> > course the winner pays the taxes which I figure would be around $1500. If
>> > you win the prize, and sell it would you be in the hole? I figure the
>> > $5000
>> > is retail, and the wholesale might be as little as a $1000. Any thoughts?
>> >
>> I know a few people who have won stuff and they received a 1099-misc with
>> the list price of the item. So you must pay income tax on the listed value.
>> And as you stated you could easily be in a position where you would get less
>> than the tax liability if you sold the item.
>
> So the moral of the story is "Don't enter a contest unless you're willing
> to buy the prize at the price of the required taxes." There's almost
> nothing I'm willing to pay that much for since I can buy it for less than
> 10 cents on the dollar at yard sales with no tax liability whatsoever.
>
Prizes aren't taxed here in Canada, but it seems a bit silly on the part
of the original poster to be thinking in terms of a prize's resale value.

What's the point of entering a contest if you don't want the prize?
If the goal is to accumulate things, better to enter contests where
the prize is something you want or can use. The chances are pretty low
that any given person will win, so why go to the trouble if you're
going to turn around and sell the prize? Might as well try for something
you do want.

Michael

Michael Black
July 16th 03, 10:35 PM
The Real Bev ) writes:
> George wrote:
>>
>> "mary" > wrote:
>>
>> > The local radio station has a contest and the prize is a $5000 watch. Of
>> > course the winner pays the taxes which I figure would be around $1500. If
>> > you win the prize, and sell it would you be in the hole? I figure the
>> > $5000
>> > is retail, and the wholesale might be as little as a $1000. Any thoughts?
>> >
>> I know a few people who have won stuff and they received a 1099-misc with
>> the list price of the item. So you must pay income tax on the listed value.
>> And as you stated you could easily be in a position where you would get less
>> than the tax liability if you sold the item.
>
> So the moral of the story is "Don't enter a contest unless you're willing
> to buy the prize at the price of the required taxes." There's almost
> nothing I'm willing to pay that much for since I can buy it for less than
> 10 cents on the dollar at yard sales with no tax liability whatsoever.
>
Prizes aren't taxed here in Canada, but it seems a bit silly on the part
of the original poster to be thinking in terms of a prize's resale value.

What's the point of entering a contest if you don't want the prize?
If the goal is to accumulate things, better to enter contests where
the prize is something you want or can use. The chances are pretty low
that any given person will win, so why go to the trouble if you're
going to turn around and sell the prize? Might as well try for something
you do want.

Michael

July 17th 03, 03:51 AM
"The Real Bev" > wrote
> So the moral of the story is "Don't enter a contest unless you're willing
> to buy the prize at the price of the required taxes." There's almost
> nothing I'm willing to pay that much for since I can buy it for less than
> 10 cents on the dollar at yard sales with no tax liability whatsoever.


Yeah, and who really needs a $5000 watch?
Anyone who does needs to get another life . . .
--Tock

July 17th 03, 03:51 AM
"The Real Bev" > wrote
> So the moral of the story is "Don't enter a contest unless you're willing
> to buy the prize at the price of the required taxes." There's almost
> nothing I'm willing to pay that much for since I can buy it for less than
> 10 cents on the dollar at yard sales with no tax liability whatsoever.


Yeah, and who really needs a $5000 watch?
Anyone who does needs to get another life . . .
--Tock

SJF
July 17th 03, 07:34 AM
"Tomcat14" > wrote in message
om...
> "mary" > wrote in message
>...
> > The local radio station has a contest and the prize is a $5000 watch. Of
> > course the winner pays the taxes which I figure would be around $1500.
If
> > you win the prize, and sell it would you be in the hole? I figure the
$5000
> > is retail, and the wholesale might be as little as a $1000. Any
thoughts?
> >
> > Tom
>
> If what you say is right then it's not a $5,000 watch. It's more like
> $1,000 plus what you could deal it for. If you are serious and wanted
> to pursue this I think there is an IRS precedent, ruling, or statement
> somewhere that allows you to immediately market the item and pay the
> gain based upon that. But I'm not sure and there are, no doubt,
> technicalities on how to do it. That concept almost seems too fair to
> allow. I hope someone posts a definitive statement on this with a
> chapter citing.
=====================
My ancient H&R tax guide says "other income" to be reported includes --

"Contest prizes -- both cash and the fair market value of won merchandise."

SJF

SJF
July 17th 03, 07:34 AM
"Tomcat14" > wrote in message
om...
> "mary" > wrote in message
>...
> > The local radio station has a contest and the prize is a $5000 watch. Of
> > course the winner pays the taxes which I figure would be around $1500.
If
> > you win the prize, and sell it would you be in the hole? I figure the
$5000
> > is retail, and the wholesale might be as little as a $1000. Any
thoughts?
> >
> > Tom
>
> If what you say is right then it's not a $5,000 watch. It's more like
> $1,000 plus what you could deal it for. If you are serious and wanted
> to pursue this I think there is an IRS precedent, ruling, or statement
> somewhere that allows you to immediately market the item and pay the
> gain based upon that. But I'm not sure and there are, no doubt,
> technicalities on how to do it. That concept almost seems too fair to
> allow. I hope someone posts a definitive statement on this with a
> chapter citing.
=====================
My ancient H&R tax guide says "other income" to be reported includes --

"Contest prizes -- both cash and the fair market value of won merchandise."

SJF

Dan Birchall
July 17th 03, 08:33 AM
(SJF) wrote:
> My ancient H&R tax guide says "other income" to be reported includes --
>
> "Contest prizes -- both cash and the fair market value of won merchandise."

Ugh. I just won two movie passes and a HIDEOUS pink hat with "Legally
Blonde II" embroidered on it... do I have to put that somewhere on
my 1040? Or can I just use the clearly NEGATIVE value of the hat to
balance out the movie passes?

-Dan

--
If you spam this address, you (obviously) agree to pay me $100/spam.

Dan Birchall
July 17th 03, 08:33 AM
(SJF) wrote:
> My ancient H&R tax guide says "other income" to be reported includes --
>
> "Contest prizes -- both cash and the fair market value of won merchandise."

Ugh. I just won two movie passes and a HIDEOUS pink hat with "Legally
Blonde II" embroidered on it... do I have to put that somewhere on
my 1040? Or can I just use the clearly NEGATIVE value of the hat to
balance out the movie passes?

-Dan

--
If you spam this address, you (obviously) agree to pay me $100/spam.

Semi-Detached
July 17th 03, 09:02 AM
I once did a postcard mailing to the LA Weakly for 4 pairs of tickets to 4
concerts in the LA area. Showed up for the first one where tix were supposed to
be at will call. They never showed up. Too bad I was depending on friends who
already had tix to get home. Luckily I scored a better seat than they had for
$10. Right next to the stage in the lower risers. Same thing happened for the
2nd show a few weeks later. I scored a $10 ticket and a friend pulled a scam
thru Ticketmaster to get me in to see the same band a few days later.
Then the paper said I went the wrong nights (even though they originally told
me I could show up any night I wanted and get in) and for the other 2 shows to
go down to the papers office and pick up the tickets. So the first 2 shows I
showed up alone to get the tix and ended up having the buy them in the parking
lot and one of them I had some girl go with me and the other I already had tix
for I traded the pari for a rare record.
Not long afterward I read an article in the LA Times about how any transactions
at the venue not carried out thru the box office are illegal. They even quoted
a father son who got arrested outside for buying hockey tix below face value.
And for the 2 shows my tix werent at will call (that I wanted to go to but
couldnt afford at the time) I walked thru the parking lot waving a $10 bill and
asking "who wants to sell me a ticket for ten bucks?" If I would have been
arrested (for the first time) I would have been ****ed
Prizes are bull****, if you cant afford to pay it yourself its not really worth
getting.

Semi-Detached
July 17th 03, 09:02 AM
I once did a postcard mailing to the LA Weakly for 4 pairs of tickets to 4
concerts in the LA area. Showed up for the first one where tix were supposed to
be at will call. They never showed up. Too bad I was depending on friends who
already had tix to get home. Luckily I scored a better seat than they had for
$10. Right next to the stage in the lower risers. Same thing happened for the
2nd show a few weeks later. I scored a $10 ticket and a friend pulled a scam
thru Ticketmaster to get me in to see the same band a few days later.
Then the paper said I went the wrong nights (even though they originally told
me I could show up any night I wanted and get in) and for the other 2 shows to
go down to the papers office and pick up the tickets. So the first 2 shows I
showed up alone to get the tix and ended up having the buy them in the parking
lot and one of them I had some girl go with me and the other I already had tix
for I traded the pari for a rare record.
Not long afterward I read an article in the LA Times about how any transactions
at the venue not carried out thru the box office are illegal. They even quoted
a father son who got arrested outside for buying hockey tix below face value.
And for the 2 shows my tix werent at will call (that I wanted to go to but
couldnt afford at the time) I walked thru the parking lot waving a $10 bill and
asking "who wants to sell me a ticket for ten bucks?" If I would have been
arrested (for the first time) I would have been ****ed
Prizes are bull****, if you cant afford to pay it yourself its not really worth
getting.

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