Tuesday, September 21, 2004
Last Tuesday, we blogged the tax consequences of Oprah Winfrey’s celebration of the premiere of her 19th season by giving away new “fully-loaded” Pontiac G-6 midsize 2005 sports sedans to each of the 276 members of the studio audience (see here). We noted the statement by a spokesperson for Pontiac (which donated the cars) in an AP story: “Pontiac will pay for the taxes.” It took a week, but the mainstream media (the Chicago Sun-Times) is catching up to the point we made: “Pontiac is covering the cost of the sales tax — but the recipients of the cars are responsible for paying state and federal income tax.” See Richard Roeper, Car Winners Finding Out There Is No Free Lunch. Roeper spoke with an Illinois accountant, who pegged the federal tax liability at around $6,000, coupled with a state tax liability of several hundred dollars. Concluded Roeper: “[N]ext spring, at least one person who was crying with happiness at the ‘Oprah’ taping is going to be crying for other reasons when she realizes the tax hit she’ll be taking.” (Thanks to Evelyn Brody (Chicago-Kent) for the tip.)
8 responses to “More on the Tax Consequences of Oprah’s Car Giveaway”
What if Oprah did not have a plan in place that called for advance submissions as to who might deserve a car and merely stated at the beginning of the show that everyone in the audience would get a new car. Wouldn’t that have been treated as true gifts and not “contest” type income?
By the way, give me a new car and I won’t cry about paying taxes as the bottom line would put me well ahead of where I was before I got the car.
If they were gifts, Oprah could deduct only $25 per car. Think that’s what she’s planning?
EVERYBODY GETS A CAR! EVERYBODY GETS A…
…tax bill! Oprah got a lot of great press last week when she gave a “free” new Pontiac car to every member of studio audience. But as the Wall Street Journal’s Taste page notes, it quickly turned into a tax…
EVERYBODY GETS A CAR! EVERYBODY GETS A…
…tax bill! Oprah got a lot of great press last week when she gave a “free” new Pontiac car to every member of studio audience. But as the Wall Street Journal’s Taste page notes, it quickly turned into a tax…
No one has mentioned that on that same episode,
Oprah featured a destitute foster family who had
devoted their lives to caring for children born
to drug-addicted mothers. This heroic couple
was about to lose their home until Oprah sur-
prised them with a $100,000 check to buy the
house in full, plus another check for $30,000.
to cover renovations. In addition, she arranged
for several stores to donate all types of new
furniture, and appliances.
Does anyone know how this family will be able to
cope with a horrific tax bill – could they again
lose their home? In this case especially, I think
Oprah should help substantially with the taxes –
after all, she looked so generous in documenting
her initial aid to them, and there is no way they
can handle such a burden.
The only comment I can make at this time is that – Oprah is one of GODS SPECIAL CHILDREN – My mother has adorned Ms. Whimphery for years – I just wish I could send her a letter to tell her about my mom. Who also is a special person.
Good Luck to Ms. Whimphery
Oprah is a generous person im sure she did something to help in this matter.
Bet on it, gambling winnings are taxable
Have you placed a friendly wager on Super Bowl XLIV? You are so not alone. The NFL’s championship game marks the biggest betting day of the year. While lots of folks will lose money, some will win nice chunks of change. And it’s a safe bet that many of…