tickets for $100 each. The person that wins the car (say value of $40,000), what would be the tax liability? I live in Calif. Thx!
4 Responses to “Win A Car In A Raffle, Do You Need To Pay Taxes?”
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4 Responses to “Win A Car In A Raffle, Do You Need To Pay Taxes?”Leave a ReplyYou must be logged in to post a comment. |
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December 5th, 2009 at 2:48 am
They would report the value of the car as income on their tax return.
But unless you are working with a registered charity doing this, be sure you can legally run a raffle like this.
December 5th, 2009 at 2:49 am
FMV (fair market value at time of drawing). If $40,000 the tax would be at least $4K. You should issue a W2G to the winner and then send a copy to the IRS. CA will want their % also.
It’s just like income.
This advice was prepared based on our understanding of the tax law in effect at the time it was written based on the facts that you provided. Click on my profile to read more. Errol Quinn Enrolled Agent Master Tax Advisor
December 5th, 2009 at 3:40 am
The value of the vehicle as determined by the promoter is taxable income to the winner. The tax will depend upon their total income for the year. Most folks who win a prize like that wind up selling it in order to pay the taxes.
December 5th, 2009 at 4:26 am
I am pretty sure you have to pay taxes..
Remember when Oprah gave everyone in her audience and new car. They got upset when they had to pay taxes on the new cars.