Re: Re: Kim's lil' parking problem
 

Ashton needs to be dating Bruce's oldest daughter, not his ex-wife.

They are trippin'!! I would put some money on the side or something and pay those taxes!! A FREE car? And they are complaining about $7K? PULEEEZE!! I work out a payment plan or something.

Trust me, no one should be complaining because they obviously are doing well enough to be sitting their behinds in the Oprah audience instead of working. :o That's just my opinion... :p

How did Twitney and Thug Lyfe Kevin manage to pull off a wedding that was not only ghetto-fab, but PWT as well? HOW YOU DO THAT?! :mad:

If they can't afford the taxes, then they might not be able to afford insurance either. :eek: And that would be a doggone shame to have one of them riding around with a raggedy bumper on a free car. Plus, they wouldn't have to pay the taxes right now would they? Wouldn't it just be a taxable gift when they file next year? I bet I'd find a way to itemize it off of there...;)

I'm glad to hear that Manute Bol is getting help from his teammates.

NO MO CAR!

Wat chu talkin' bout? I don't really think it's about that.

I've been trying to make reservations for the show since Monday! I'll be playing "hooky" on that day. Crossing my fingers I get through. :mad:

As like all shows when you win something or with anything you win you have to pay the taxes on it. I doubt that a car that cost 26k or howevr much it cost, will actually cost them $7k in taxes, depending on where they live. I know that the county that I live in the sales tax is only 6%, so if they get the car from their town which is what is happening so that they can get what they want in the car, I can't see any city having a sales tax of 27% that they would have to pay $7k in taxes. But hey if someone does live in a city or county where the sales tax is 27%....that really bites.

You are not paying sales taxes, you are paying income taxes, because that what the gub-mint see it as--INCOME. My understandind is that none work related income like this is taxed at a higher rate and typically the taxes come OFF THE TOP--not when you file your taxes. I know they do that with the lottery. 7,000 on a 26K car is about 28% taxes which is about right for income taxes.

A radio station here gave away a house, car, furniture and a bunch of other stuff. Part of the prize was a "morgage" because people were going to have to pay taxes on all of that stuff.

It is also not unusual for people on game shows like the Price is Right to sell a bunch of their smaller stuff (the refrigerator, scooter, etc.) to pay all of the taxes.

One last things about game shows and taxes....I read somewhere that the show Extreme Makeovers (That's the one about the houses right?) trys to get around the tax issue by "renting" the person's house for 7 days for the value of the renovations. The IRS allows you to rent your primary residence for up to a certain number of days a year and not claim it as income. Lots of people tried to do this during the 96 Olympics in Atlanta.

I don't think that the two are comparable. We're talking dropping $7,000 as opposed to $250 in a month (and that's a lot for insurance). I can afford to pay my car insurance, but I couldn't pay the taxes on a new car upfront. From the way I understand it, you have to pay the taxes before you can get the prize. That's how my mommy used to explain it to me when we watched TPIR. I don't know if that's true, or not. Now, if you can put it on a payment plan, then that should be cool.

I'm of the opinion that you shouldn't have to pay for something that's FREE. Free is free, lol.

Giveaways are not ALWAYS free.
If you notice with some giveaways there is FINE, FINE print which tells you that there could be taxes and other costs associated with the winnings. Watch those game shows (Game show network) like Wheel of Fortune, etc. At the end of the show, when all the credits are rolling it says it.

I"m sure GM isn't tripping, they got what they wanted PUBLICITY for the vehicle.

Income taxes are assessed once a year. The IRS doesn't randomly collect taxes throughout the year for lottery winnings or other prizes.

As far as some of the people not being able to pay the tax, which will vary based on their situation, they've got a few options. They can always give the car back if they can't appreciate the gift and don't want to be bothered with Uncle Sam. They can sell the car and get an affordable car in order to pay the tax. The reports say the highest amount of tax is $7K. Depending on what they buy and how much money they have left over, they may not be taxed the $7k and will have plenty of change left over which IMO is a better deal. It'll still be a free car and they have until April 15th to work that out.

Most likely GM will claim this as a marketing expense since Oprah was the go between. If they were given a 1099 for the value of the car, I'm sure the other tax consequences were thought of also. Oprah may have gifted them an amount to cover the tax since she really didn't give them the cars.

...but they do get THEIRS...right?

Not 100% true....if you receive a cash distribution like lottery (over a certain amount only, I think) or, say a 401K early withdrawal the IRS most certainly wants an "estimated" tax paid upfront. Then, at tax time you are expected to square up. I don't know if they do this with actual gifts like cars, but they do it with money.

I know when you see lottery winners with those 500 bigillion dollar checks that is not what is actually put in their bank accounts.

That's what I thought. I know a rep for the IRS is at the casinos when you hit over (I THINK) $1,000. I wouldn't know, but it's what I heard. I only won $800. :o

I don't want to bore the thread with the tax code so I'll try to keep it simple, lol. Technically, the IRS assesses income taxes once a year. Throughout the year you can make estimated payments (w/h form your paycheck or just payments because you make too much money) to avoid having to pay taxes at all or the underpayment penalty. They don't penalize you for getting unexpected income and assess an estimated tax on you because of it.

In the case of lottery winnings, you will receive the net amount (whoever issues the 1099 does the withholding) so it's not like you really saw the money or really got the full amount. It's treated like wages paid by an employer who withholds the taxes hence the "net amount". Estimated payments and w/h are technically not the same thing. In the case of prizes, you get a 1099 for the value, no taxes are taken out and you aren't expected to make an estimated payment at that time. Can you willingly make a payment? Yeah, sure. But why up and give the IRS the money when it can stay and collect interest until it's actually due. I recall one client in this situation and we never made an estimated payment because of their new income.