Warning: this post contains the dreaded phrase “I remember hearing somewhere…”
On “The Price is Right,” contestants often win cars. The implication is that the car is now theirs, forever, free except for the taxes they must pay on it.
However, I remember hearing somewhere that contestants often only win a lease for the car, lasting only a few years. It’s still a great deal, and if they sell their previous cars and earn interest on the money, they can continue the lease when it officially ends. Or they can give the car back. Either way, it’s not exactly their car.
Am I right? Anybody won a car? Or anything else that was only a lease?
I think it would be deceptive to tell a contestant they’ve won an actual car and then tell them it’s a lease. The Price Is Right has given away a LOT of cars in the past 30 years. I think something like this would have made the news at one time or another.
The contestants must be able to pay the taxes of whatever they win. I’m sure that can’t be more than a few hundred dollars on average.
I don’t know about the price is right or such shows but one of my mates won a car in a charity raffle. He was given a choice by the charity: you can either have the car or we can give you $x (the value of the car). He was without a car at the time and he chose to take the car.
The charity was apparently pretty surprised, they’d been running raffles like this for years and he was one of very few people to elect to take the car, most people take the cash.
The car he got was a base level BMW, because the company that donated it had not expected to ever have to hand over an actual car, it didn’t have airconditioning, cd player etc.
I’ve seen such raffle ads in the backs of car magazines. Instead of a base model BMW, it’s usually a Porsche Boxter of some other high sports car. Tickets usually run $100+. There is usually a cash option.
You pretty much walk offstage and go to sign tax forms there and then – you have to pay California state taxes as well as federal taxes on anything you win. I’m assuming the state would then go after you in whatever ways they have if you don’t pay up as is expected.
That would be true if you were talking about the sales tax on the car. But when you win a prize like this, it’s income, so you have to pay income tax on it. If the car is worth $20,000, and you’re in the 25% tax bracket, you’re looking at $5000 of income tax.
I always wondered about the taxes that you have to pay for something like that. I am sure its more than “a few hundred dollars.” Lets say I go on Wheel of Fortune, for example, and win cash. I am pretty sure I’d be paying a 35% tax on that money, since thats my tax bracket and it is income. Same would apply to a car, I’d think, so it could be A LOT of money depending on the type of car. In some cases I could see wanting the cash instead of the car to cover the taxes owed.
I won a 2002 Chevy Tahoe on Jeopardy a couple years ago. Actually it was supposed to be a 2001 model, but the Chevrolet had closed down the production line for 2001 so I got the 2002 model.
The vehicle was factory ordered, and I got to choose the color. The car had just about every option one could imagine, and was delivered to a local dealer.
I traded the Tahoe in for a smaller Blazer & some cash, however. The Tahoe was way too big.
Speaking of “The Price Is Right,” I surely hope that the contestants have the option of taking the cash instead of that hideous array of garbage they make the winners of each puzzle spend their winnings on.
I knew someone that won a Lincoln Continental back in the late 50’s on the original “Price is Right”. He’d gone to NYC with a friend, who wanted to go on to Boston. My friend had less than $5.00 on him, so he stayed in NYC and rode the subway all day. The next day that got boring so he went to see the game show and got chosen. He didn’t win anything, until the car at the last of the show. After the show they told him there was some fee that had to be paid and of course whatever it was he didn’t have it. He called his dad, who ended up with the car. His name was Spencer Dean from Eufaula, Alabama.
And they haven’t had to buy the hideous garbage (at least not on the U.S. version of the show) in years. That used to be the part that was the most fun: watching someone be required to buy a bunch of merchandise until their winnings were used up, and they could take the rest as a gift certificate or on account.
Now it’s just cash. That fact makes Wheel of Fortune even less interesting than before, if that’s possible. I don’t watch it much, but my folks watch it religiously.
In 2000, I won a trip to Puerto Rico as a consolation prize on Jeopardy. I came in second that day.
Only first place contestants on Jeopardy keep the money. They do it this way to encourage people to wager more aggressively on Daily Doubles and Final Jeopardy. Likewise, I couldn’t cash in the consolation prize.
I was forced, then, to relax for a week in Puerto Rico. Mrs. Moto and I actually used the trip as our honeymoon.
I had to pay both California state tax and Federal income tax on the value of the prize, even though I live in Virginia.
Canada too. Same with lotteries; if you win $20 million in a lottery here, it’s tax free. And none of this annuity stuff; they hand you a cheque for $20 million and call you a cab to take you to your bank. That’s the way to do it!
