www.cnn.com/2007/TECH/space/01/28/free.ride.ap/index.html
Is this really possible ? In USA if you win a contest and you get
something else than money as a prize you have to pay taxes ?
That's crazy...
I don't think you want to start a list topic about income tax in the
USA. You are in a maze of twisty tax code clauses, all alike. You
are likely to be eaten by a grue.
There are some small loop-holes, but pretty much any "gain" an
individual experiences through whatever means is taxed.
Thus it is not terribly difficult to bankrupt someone who does not
understand this:
1. Find a company or asset that is high value, but very difficult to
sell at assessed value(which is "impossible" in a capitalist economy,
yet such things do exist - diamonds have a similar property thanks to
DeMonopoly)
2. Give it to the person you wish to bankrupt.
They can't just give it away, or sell if for a lower value if it
already has an established value - that's very similar to money
laundering, and there are very powerful laws against that sort of
thing. One has to somehow devalue the asset before selling it to pay
the taxes they owe on it.
I'm not a lawyer, accountant, or tax code specialist. YMMV. No
animals were harmed in the making of this opinion, but many wanted
seconds and are considered addicted.
-Adam
On 1/29/07, Dumitru Stama <spam_OUTlistTakeThisOuTmirosat.com> wrote:
>
> www.cnn.com/2007/TECH/space/01/28/free.ride.ap/index.html
> Is this really possible ? In USA if you win a contest and you get
> something else than money as a prize you have to pay taxes ?
> That's crazy...
>
> -
> www.cnn.com/2007/TECH/space/01/28/free.ride.ap/index.html
> Is this really possible ? In USA if you win a contest and you get
> something else than money as a prize you have to pay taxes ?
> That's crazy...
Of course it's crazy.
Of course it's true.
After all, if the Government didn't tax non-monitary transactions,
people might start using barter to avoid paying taxes! And then
the entire ponzi scheme of using government fiat money would
collapse...
Bill
--
Psst... Hey, you... Buddy... Want a kitten? straycatblues.petfinder.org
> -----Original Message-----
> From: piclist-bouncesKILLspammit.edu On Behalf Of Dumitru Stama
> Sent: Monday, January 29, 2007 8:47 AM
>
> www.cnn.com/2007/TECH/space/01/28/free.ride.ap/index.html
> Is this really possible ? In USA if you win a contest and you get
> something else than money as a prize you have to pay taxes ?
Yes, in the USA all prize winnings, cash, services or merchandise, are taxed
as income.
>From IRS Publication 525:
"Prizes and awards. If you win a prize in a lucky number drawing,
television or radio quiz program, beauty contest, or other event, you must
include it in your income. For example, if you win a $50 prize in a
photography contest, you must report this income on Form 1040, line 21. If
you refuse to accept a prize, do not include its value in your income.
Prizes and awards in goods or services must be included in your income at
their fair market value."
Death and taxes, my friend, you can't escape them as they are the only true
constants in this world.
-Mario
> On 1/29/07, Dumitru Stama <.....listKILLspam.....mirosat.com> wrote:
>>
>> www.cnn.com/2007/TECH/space/01/28/free.ride.ap/index.html
>> Is this really possible ? In USA if you win a contest and you get
>> something else than money as a prize you have to pay taxes ?
>> That's crazy...
>>
>> --
On Jan 29, 2007, at 5:46 AM, Dumitru Stama wrote:
>
> www.cnn.com/2007/TECH/space/01/28/free.ride.ap/index.html
> Is this really possible ? In USA if you win a contest and you get
> something else than money as a prize you have to pay taxes ?
>
Yep. Although $25k taxes on $138k value sounds quite low.
And since "value" of prizes is likely to be MSRP rather than
typical street price, you can end up doing quite badly. Makes
you wonder how many of those TV game show winners (of non-cash
prizes) actually manage to take home anything.
> Thus it is not terribly difficult to bankrupt someone who does not
> understand this:
> 1. Find a company or asset that is high value, but very difficult to
> sell at assessed value
> 2. Give it to the person you wish to bankrupt.
>
Gifts are NOT taxable to the receiver.
>
> On Jan 29, 2007, at 6:47 AM, M. Adam Davis wrote:
>
> > Thus it is not terribly difficult to bankrupt someone who does not
> > understand this:
> > 1. Find a company or asset that is high value, but very difficult to
> > sell at assessed value
> > 2. Give it to the person you wish to bankrupt.
> >
> Gifts are NOT taxable to the receiver.
>
> BillW
Okay, so gifts are taxable, but _generally_ the receiver is not
responsible for the taxes, the giver is.
Arrangements can be made for the recipient to pay the taxes rather
than the gift giver.
Gift taxes do not kick in until the gift giver has given over one
million dollars in gifts (sum total for all recipients over one's
lifetime).
Gifts totalling less than $12,000 per recipient per year are not taxable.
Also excluded are gifts to one's spouse, gifts of tuition or medical
expenses, and gifts to political organizations.
So gifting large value items to other people would, in fact, be a good
way to bankrupt myself if I can't afford the taxes (and I will have
crossed the $1,000,000 gifts given mark in my lifetime)
>
> On Jan 29, 2007, at 6:47 AM, M. Adam Davis wrote:
>
> > Thus it is not terribly difficult to bankrupt someone who does not
> > understand this:
> > 1. Find a company or asset that is high value, but very difficult to
> > sell at assessed value
> > 2. Give it to the person you wish to bankrupt.
> >
> Gifts are NOT taxable to the receiver.
>
> BillW
> I must be confusing that with tax laws concerning gifts over $10k.
>
For gifts over $10k ($13k these days?), the person doing the gifting
pays "gift tax" (which is logically similar to inheritance taxes,
which makes more sense than a lot of the tax code.)
There are interesting exceptions. I asked my accountant whether
people sending their kids to expensive schools owed gift taxes on
the tuition/etc. Nope. "Normal responsibility" or somesuch.
On 1/29/07, William Chops Westfield <@spam@westfwKILLspammac.com> wrote:
>
> On Jan 29, 2007, at 6:47 AM, M. Adam Davis wrote:
>
> > Thus it is not terribly difficult to bankrupt someone who does not
> > understand this:
> > 1. Find a company or asset that is high value, but very difficult to
> > sell at assessed value
> > 2. Give it to the person you wish to bankrupt.
> >
> Gifts are NOT taxable to the receiver.
>
> BillW
Oh yes they are. Ask any Probate attorney... people spend a lot of
money cleaning up tax messes in wills and when family members die. A
family member made a very good living doing that for many many years.
> On 1/29/07, William Chops Westfield <RemoveMEwestfwTakeThisOuTmac.com> wrote:
> >
> > On Jan 29, 2007, at 6:47 AM, M. Adam Davis wrote:
> >
> > > Thus it is not terribly difficult to bankrupt someone who does not
> > > understand this:
> > > 1. Find a company or asset that is high value, but very difficult to
> > > sell at assessed value
> > > 2. Give it to the person you wish to bankrupt.
> > >
> > Gifts are NOT taxable to the receiver.
> >
> > BillW
>
> Oh yes they are. Ask any Probate attorney... people spend a lot of
> money cleaning up tax messes in wills and when family members die. A
> family member made a very good living doing that for many many years.
>
> Nate
> Gift taxes do not kick in until the gift giver has given over one
> million dollars in gifts (sum total for all recipients over one's
> lifetime).
>
Including after death, yes? That is, you have this ~$1E6 limit that
you can spend on gifts, or pass on to your beneficiaries, but if you've
given it as gifts during your lifetime, you no longer have an exempt
part of your estate...
So if you have significant wealth, it makes sense to start making
non-taxable gifts to your would-be beneficiaries (ie to a trust fund
or similar) at a relatively early date. Gotta keep those accountants
and lawyers well-employed.
On Mon, 2007-01-29 at 15:46 +0200, Dumitru Stama wrote:
> www.cnn.com/2007/TECH/space/01/28/free.ride.ap/index.html
> Is this really possible ? In USA if you win a contest and you get
> something else than money as a prize you have to pay taxes ?
Yup. Every time I watched an American game show and saw someone win a
car, the first thing I thought was "I hope they realize they'll have to
pay taxes".
> That's crazy...
Yup, but so much of tax law can be considered crazy.
I do wonder though, do other countries tax "prizes" like this? I know in
Canada if you win the lottery you pay no taxes on it. You only pay taxes
on what you make with that money (i.e. the interest you make on your
winnings is treated as income).
>> Gifts are NOT taxable to the receiver.
>
> Oh yes they are. Ask any Probate attorney... people spend a lot of
> money cleaning up tax messes in wills and when family members die.
In theory, the taxes are paid by the estate of deceased. In
practice, if the estate is high-value but cash-poor, you have
to find money for the taxes somewhere else. Presumably this
falls into the "taxes may be paid by the recipient under
special circumstances" case that was mentioned... Ensuring
that your beneficiaries are not put in such awkward positions is
known as "estate planning." :-)
On Jan 29, 2007, at 11:09 AM, Dario Greggio wrote:
>> inheritance is not considered a gift, and is as taxable
>> as income is.
Actually, I think inheritance and gifts are treated pretty much
identically (you have the exemption that covers inheritance AND
gifts, for instance.) Wouldn't want granddad to just gift away
everything on his deathbed and avoid taxes.
For inheritance, you have the complication that the "gift-giver"
isn't around to be responsible for paying the taxes.
>
> really ? not in Italy... and every attempt to make them taxable has you
> called "communist" (by the big politician you surely remember of...)
>
estate taxes aren't overly popular in the US either. But they
do exist and are quite substantial (about the same as income tax.)
On Mon, 29 Jan 2007 14:16:16 -0500, Herbert Graf wrote:
>...
> I do wonder though, do other countries tax "prizes" like this? I know in
> Canada if you win the lottery you pay no taxes on it. You only pay taxes
> on what you make with that money (i.e. the interest you make on your
> winnings is treated as income).
In the UK competition prizes aren't taxed. With the National Lottery, for example, the tax is taken from the ticket sales, so winnings are tax free. If
you win £32,000,000 (the largest individual payout so far) you get the cheque for the whole amount on the Monday morning. The trick is having the
winning numbers, of course!
On Mon, 29 Jan 2007 20:09:23 +0100, Dario Greggio wrote:
> M. Adam Davis wrote:
>
> > Unfortunately, inheritance is not considered a gift, and is as taxable
> > as income is.
>
> really ? not in Italy... and every attempt to make them taxable has you
> called "communist" (by the big politician you surely remember of...)
In the UK, Inheritance Tax (known as "Death Duties") have been a feature for most of the last century - and we've never been communist, that I'm
aware! :-) It's the reason why there are so few Stately Homes left, and the ones that remain are all open to the public, with things like Animal Parks
to get people to go along and spend money. Otherwise they'd have to have been sold off to pay the Death Duties at the boundary of generations.
Since nobody buys Stately Homes, the result was that a lot were either just abandoned and eventually fell down, or they were demolished and the
land parcelled up and sold off. The Good News is that you can visit the remaining ones and their attractions, such as the famous Lions of Longleat!
Anyone who actually has read the early texts on capitalism and communism
(Smith, Marx, Engels) will know that inheritance tax is not a thing of
communists. In fact, real capitalism postulates that everyone must start
with the same amount in the bank (namely nothing), and work their way to the
top. All inheritance goes to the state. I bet that's not what the average
right wing republican knows as capitalism...
Most cantons (=states) in Switzerland have abolished inheritance tax
completely. I don't know about Australia (where I currently live) but
judging from the income taxation (which is nothing short of robbery) I'd be
surprised if the government didn't have its fingers in the corpses pockets.
> In the UK competition prizes aren't taxed. With the National Lottery, for example, the tax is taken from the ticket sales, so winnings are tax free. If
> you win £32,000,000 (the largest individual payout so far) you get the cheque for the whole amount on the Monday morning. The trick is having the
> winning numbers, of course!
>
> But *everything else* is taxed here...
>
> Cheers,
>
>
> Howard Winter
> St.Albans, England
>
Same in NZ as far as I know. There is a difference between NZ & the UK
as far as betting is concerned however. I think in the UK you can pay
extra to "insure" youself against having to py tax on any winnings.
Not totally sure on this though.
>... <snip> I expect that to change once the duplicrats choose not to extend a variety of middle-upper class tax cuts created by the replicons.
>
>-Adam
>
>
On Tue, 30 Jan 2007 11:31:55 +1300, Richard Prosser wrote:
> There is a difference between NZ & the UK
> as far as betting is concerned however. I think in the UK you can pay
> extra to "insure" youself against having to py tax on any winnings.
> Not totally sure on this though.
You're talking about betting tax, which was introduced in the 1980s if I remember rightly, and only applies to gambling, not competitions or lotteries
(the former doesn't have tax, the latter as I mentioned is taken out of the stake, not the winnings).
With betting the Government want a percentage of the total amount bet. The Industry decided to offer the punter the choice of "paying the tax"
when they make the bet - basically you're gambling an extra amount to cover the tax, otherwise it's deducted from the winnings, but either way you
pay it!
mirosat.com> wrote:
