# Gifts vs Winnings. Q about taxes **URL:** \ **Category:** Factual Questions\ **Created:** [April 2, 2004, 2:08am UTC](https://boards.straightdope.com/t/gifts-vs-winnings-q-about-taxes/237830 "2004-04-02T02:08:46Z")\ **Posts on this page:** 10\ **Page:** 1
**Author:** ![Bear\_Nenno](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bear_nenno/32/3358_2.png) [@Bear\_Nenno](https://boards.straightdope.com/u/Bear_Nenno)\ **Post date:** [April 2, 2004, 2:08am UTC](https://boards.straightdope.com/t/gifts-vs-winnings-q-about-taxes/237830/1 "2004-04-02T02:08:46Z")
When people win stuff on games shows, they have to pay taxes for it, right? What about on something like “Extreme Makeover - Home Edition” where they are given all kinds of crap? From tvs to furniture, not to mention a whole new freakin house. Do they have to pay taxes on all the stuff they get? If not, why not? I watched the million dollar Price is Right, and the showcase was something like $80,000 dollars or something. Doesn’t the guy have to pay taxes on that now? If he won cash, he’d be able to just give a portion to The Man. But he won prizes, does he have any option other than selling the prizes just to pay the taxes for them? That kind of sucks. ---
**Author:** ![dre2xl](https://avatars.discourse-cdn.com/v4/letter/d/34f0e0/32.png) [@dre2xl](https://boards.straightdope.com/u/dre2xl)\ **Post date:** [April 2, 2004, 2:33am UTC](https://boards.straightdope.com/t/gifts-vs-winnings-q-about-taxes/237830/2 "2004-04-02T02:33:21Z")
I’m pretty sure you still have to pay taxes on the retail prices of the items. Many winners never get to keep their free brand-new car or whatever–they have to sell them off for taxes. ---
**Author:** ![Bear\_Nenno](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bear_nenno/32/3358_2.png) [@Bear\_Nenno](https://boards.straightdope.com/u/Bear_Nenno)\ **Post date:** [April 2, 2004, 2:43am UTC](https://boards.straightdope.com/t/gifts-vs-winnings-q-about-taxes/237830/3 "2004-04-02T02:43:09Z")
Even the stuff on Extreme Makeover - Home Edition? Or Trading Places, or other shows like that? ---
**Author:** ![Atrael](https://avatars.discourse-cdn.com/v4/letter/a/6a8cbe/32.png) [@Atrael](https://boards.straightdope.com/u/Atrael)\ **Post date:** [April 2, 2004, 3:05pm UTC](https://boards.straightdope.com/t/gifts-vs-winnings-q-about-taxes/237830/4 "2004-04-02T15:05:16Z")
Acording to the rules posted [here](http://tlc.discovery.com/fansites/tradingspaces/geton/geton.html) on Trading Spaces at least the homeowners are responsible for all taxes (look near the bottom). Now I don’t know if that means they actually have to pay something, or that’s just a generic disclaimer. ---
**Author:** ![TaxGuy](https://avatars.discourse-cdn.com/v4/letter/t/b19c9b/32.png) [@TaxGuy](https://boards.straightdope.com/u/TaxGuy)\ **Post date:** [April 2, 2004, 3:46pm UTC](https://boards.straightdope.com/t/gifts-vs-winnings-q-about-taxes/237830/5 "2004-04-02T15:46:23Z")
I haven’t done any specific research on this, but I’m pretty sure that prizes awarded to people on TV shows are includible in such individuals’ gross income, even on shows like Trading Spaces, etc. I don’t think they’re really gifts–they’re more like payments for agreeing to participate on a television show or something that is won in a contest (even if the person never entered the contest himself). If someone has to sell their new car to pay the taxes on it, well that’s just too bad. At least they get the leftover cash. ---
**Author:** ![Bear\_Nenno](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bear_nenno/32/3358_2.png) [@Bear\_Nenno](https://boards.straightdope.com/u/Bear_Nenno)\ **Post date:** [April 2, 2004, 9:11pm UTC](https://boards.straightdope.com/t/gifts-vs-winnings-q-about-taxes/237830/6 "2004-04-02T21:11:08Z")
Thanks **TaxGuy**. So now we know the _real_ reason the family is always crying at the end of the show. Oh, thanks to everyone else too. ---
**Author:** ![LSLGuy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lslguy/32/5813_2.png) [@LSLGuy](https://boards.straightdope.com/u/LSLGuy)\ **Post date:** [April 3, 2004, 5:10pm UTC](https://boards.straightdope.com/t/gifts-vs-winnings-q-about-taxes/237830/7 "2004-04-03T17:10:33Z")
I read an article a month or two ago about that show that gives away dream houses. So far NONE of the winners has been able to actually keep the house. All of them were sold immediately to pay the taxes. If not for taxes, many of these dream houses would require one or two full time gardeners / maintenance / housekeeping people to keep up. A typical winner couldn’t afford that either. ---
**Author:** ![EhhMon](https://avatars.discourse-cdn.com/v4/letter/e/ce73a5/32.png) [@EhhMon](https://boards.straightdope.com/u/EhhMon)\ **Post date:** [April 4, 2004, 11:19am UTC](https://boards.straightdope.com/t/gifts-vs-winnings-q-about-taxes/237830/8 "2004-04-04T11:19:49Z")
I know a couple of people who have won cars on the Price is Right. They say they cannot drive the car off the lot unless they pay the tax on the car. ---
**Author:** ![Eleusis](https://avatars.discourse-cdn.com/v4/letter/e/f4b2a3/32.png) [@Eleusis](https://boards.straightdope.com/u/Eleusis)\ **Post date:** [April 4, 2004, 11:50am UTC](https://boards.straightdope.com/t/gifts-vs-winnings-q-about-taxes/237830/9 "2004-04-04T11:50:03Z")
Separate but related question: If I singly cashed in a $100 million lottery ticket, and later wanted to give $5 mil each to my parents and my wife’s parents, we would pay double taxes, right? Meaning I’d pay the highest “windfall/corporate” rate, and then they’d have to pay it again? But if I’d put their names on the ticket before I cashed it in, we’d only pay taxes once, and save hundreds of thousands of dollars, right? The difference is so trivial, the latter almost sounds like cheating. Is it? ---
**Author:** ![LSLGuy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lslguy/32/5813_2.png) [@LSLGuy](https://boards.straightdope.com/u/LSLGuy)\ **Post date:** [April 4, 2004, 12:03pm UTC](https://boards.straightdope.com/t/gifts-vs-winnings-q-about-taxes/237830/10 "2004-04-04T12:03:05Z")
I read an article about that; according to the IRS, the critical distinction is whether you agreed to split the cash BEFORE you won. Not before you turned in the ticket, but before the drawing. How can they tell? Beats me. But that’s the critical decision. An agreed split before the draw means you’re all separate winners paid directly by the lottery. A split afterwards means gift taxes must be paid on any large re-distribution from the winner to his/her friends/relatives.