Community Chat

[wismiss]

I was watching one of the more popular game shows and one of the contestants won a trip to some place I had never heard of.  Do you know if the winner has to pay federal and/or state income tax on their winnings even if the winnings aren't cash?  And, if you don't want a trip that you won, can you refuse to take the trip?  

[Johnnyeager]

Yes, you will be required to pay taxes on prizes such as cars, when and where applicable.

I know of at least one instance where items, such as vehicles,  were allowed to be exchanged for cash (The Price is Right.) The cash was taxed.

[newjerseygirl]

@wismiss My niece was on Wheel of Fortune.  She did very well.  She made it to the final Puzzle.  Overall she won cash, a trip(cruise) and a car for solving the final Puzzle. 

She had to pay taxes on everything.  The taxes were in the thousands of dollars.

It took a long time for her to get her prizes.  First, you have to wait for the show to air.  They are taped weeks in advance.  Then she had to wait for the show to contact her to begin the process of getting the prizes.  This took months.  

She got her car almost a year after her show aired.  

[KingstonsMom]

When I first moved to LA in the 70's I was on Wheel of Fortune, did very well, but won lots of furniture, appliances etc., that would never fit into my apt., LOL!

Yes, you do have to pay 'luxury' tax, but can deline any 'prize', which all have a dollar amount affixed to each of them and you can take the cash instead.

You still pay the taxes on the value if you opt for cash instead.

[panda1234]

@KingstonsMom My brother was in the audience of The Ellen Show for one of the 12 Days of Christmas give away shows two years ago. I can tell you no taxes were paid. All of the give aways were under a certain $ amount so they did not have to do that. 

[CherryHugs]

One year a neighbors son was on wheel of fortune. He didnt do good lol.

[Johnnyeager]

Ellen's Christmas "giveaways" are characterized as gifts.  Completely different tax consequences than a prize earned in a competitive contest.

[PINKdogWOOD]

Sometime in the 1060s I had an Aunt who was on The Price is Right. What ever possessed her to try to get on this show is totally beyond me but she was. She won a boat!!!  Well growing up in NJ being really close to the shore of course after she received it I remember a few of us went out on it. Happened only once then they sold the boat. No one in the family knew nothing about boating, it was fun for a NJ minute!

[tototwo]

A friend of a friend was on Wheel of Fortune several years ago.  Since the shows are recorded weeks in advance, she was not allowed to tell anyone - even her family - if she won, or what she won, or anything.  She had to sign some kind of secrecy document at the time the show was taped.  So we all found out on the night the show aired if she won.  She didn't.   It must have been extremely difficult for her not to talk to anyone about it all those weeks!

I've heard that all the prizes given away during Oprah's shows were taxed.  On the day of her big car give-away, all audience members had to decide to pay the taxes, or take the car, before they left the studio that day.   Most of them refused the car.   Of course, that may or may not be true.  

[Desertdi]

NO.....but I knew someone who won a VERY expensive car, and couldn't afford to buy insurance for it.