SS is shocked you have to pay taxes on game show prizes
I don't think shocked that they have to pay taxes as shocked that you have to pay taxes before you are allowed to pick things up. I always thought you paid the taxes when you file - not before you pick up the new car you just won. That would be hard for a lot of people - to come up with the tax money within 90 days.
it's kind of a catch 22. The recipient doesn't HAVE to pay taxes until they file. However, the donor doesn't HAVE to release the gift until their conditions are met. One of those conditions may be that the taxes are paid before the delivery of the gift.
My old roommate in Chicago was one of the people who was in the audience when Oprah gave away a Pontiac G6. The show paid for all of the STATE/LOCAL taxes and fees, but not the federal taxes. Me and her mom helped her pay the tax so she could keep the car.
This was lso on GMA this morning. What I didn't like was they used an example of a woman who had won the showcase on The Price is Right, and wasn't able to get her prizes until she paid all taxes. they were trying to make it out like this was some heinous rule the game shows came up with, when in fact, its the IRS and tax laws. In the end, she said "don't go on a game show if you're broke" they also interviewed a CPA who said these are IRS rules; the game shows don't make them up, and they tell each nad every contestant if they win, they will owe tax.
Heck, if you win any money above a certain amount in the lottery, casino, or say through a 50/50, you have to provide your info so you can be issued a W-2 for your winnings, so there's no free lucnh anywhere!
And i'm kind of curious about the Oprah car giveaway, since they mentioned that too, and that people had to pay 7K in taxes, which to me, seemed to be a bit high. Was that the acse with your roommate?