Let’s say that a company is having a sweepstakes where the grand prize has a cash value of $1700. Since they can’t require a purchase for me to win, I read the rules, and I learn about how I can enter the sweepstakes online, one entry per day for the next 78 days. Additionally, I (my household actually) can submit one entry per day for each email account we have access to.
So, I’m submitting an entry for myself, and having my wife submit one using her email address, and our daughter submits one using her email address (she’s 16, and the minimum age is 13 for this thing). With 234 entries during the entry period I think I’m maximizing our family’s chances of winning this Grand Prize (the prize is something that is shared equally among the entire family).
I get that I’m responsible for state and federal income taxes on this if my name is drawn. And if my wife’s name is drawn, well, we file jointly, so no biggie.
If the prize is officially awarded to my daughter, who has no personal income during the year, and is listed as a dependent on our tax returns, how big a tax burden is she looking at (don’t worry; I’m a Dad, not an asshole, and if there actually is one, I’ll be picking it up)?