MickinMD Posted February 24, 2020 Share #1 Posted February 24, 2020 I'm pleased to see the car prizes on the game shows, where the quoted price is close to MSRP, but I can't understand the quote trip costs, which are often 3-4 times what it would cost you to arrange through a travel agent! I'm Watching "Let's Make a Deal." One contestant won a trip to San Diego (the show is shot in Los Angeles with a lot of Californians as contestants!) for 3 days with yoga lessons values at $4000+. The next contestant won a trip to Toronto for 4 days for $6,000+. For the taxes a middle class person would pay on these prizes, he/she could do the same trip (I assume it's for 2) himself! 2 Link to comment Share on other sites More sharing options...
bikeman564™ Posted February 24, 2020 Share #2 Posted February 24, 2020 All products are based on MSRP, but trips? I have no idea Link to comment Share on other sites More sharing options...
Razors Edge Posted February 24, 2020 Share #3 Posted February 24, 2020 49 minutes ago, bikeman564™ said: All products are based on MSRP, but trips? I have no idea I think Mick's worry is that it is also MSRP (of a sort), and that while it can be done similarly for way cheaper, the "winners" are on the hook for the MSRP level taxes, but only really getting a more realistic level of value - often equal to the taxes paid Seems like winning is losing in that case, which is probably why there is a "cash value" option offered? The prize is just an advertisement for the product and not really meant to be used by the winners? 1 Link to comment Share on other sites More sharing options...
Dirtyhip Posted February 24, 2020 Share #4 Posted February 24, 2020 It's taxes as income, correct? So, it depends on your tax rate. I have heard of people having to sell their winnings to cover the taxes. It would be nice if they treated it like capital gain, and with that it would be very low taxes for most. I paid $0 taxes on some gains we pulled in. It is due to being below the cap. Use of deductions really helps, IMHO. Link to comment Share on other sites More sharing options...
Kzoo Posted February 24, 2020 Share #5 Posted February 24, 2020 2 minutes ago, Dirtyhip said: It's taxes as income, correct? yes Link to comment Share on other sites More sharing options...
Kirby Posted February 24, 2020 Share #6 Posted February 24, 2020 In this article from 2017 about a Wheel of Fortune contestant, they say the show allowed the contestant to find a "cheaper version' of two trips he won so that he paid less in taxes, but they don't discuss the mechanics of how that worked. https://www.marketwatch.com/story/this-man-won-30000-on-wheel-of-fortune-heres-how-much-he-got-to-keep-2016-09-19 Quote What he took them for, in the end, was $31,700 in cash and prizes — $16,400 in cash and two vacations valued at $15,300: a trip to Chile and a cruise down the Danube River. All game show winnings — cash, prizes, trips, etc. — are taxed like regular income. The show allowed him to find less expensive versions of his two trips, so he was able to pay taxes on vacations worth $10,800 instead of the original $15,300. Link to comment Share on other sites More sharing options...
Dirtyhip Posted February 24, 2020 Share #7 Posted February 24, 2020 15 minutes ago, Kzoo said: yes They could take the cash, up their IRA contribution and not pay a dime. The prize money just funded their retirement. There are options. If they are really not in a good way financially, this could still be a positive windfall for them. Link to comment Share on other sites More sharing options...
Kzoo Posted February 24, 2020 Share #8 Posted February 24, 2020 11 minutes ago, Dirtyhip said: up their IRA contribution and not pay a dime. Max contributions... Link to comment Share on other sites More sharing options...
Dirtyhip Posted February 24, 2020 Share #9 Posted February 24, 2020 Just now, Kzoo said: Max contributions... Of course, but most can not afford this. $19,500 + any catch up for over 50. If someone is worrying about the taxes on a prize, they likely are not maxing out. Taxes seem nominal for vacation prize. Link to comment Share on other sites More sharing options...
MickinMD Posted February 24, 2020 Author Share #10 Posted February 24, 2020 1 hour ago, Dirtyhip said: It's taxes as income, correct? So, it depends on your tax rate. I have heard of people having to sell their winnings to cover the taxes. It would be nice if they treated it like capital gain, and with that it would be very low taxes for most. I paid $0 taxes on some gains we pulled in. It is due to being below the cap. Use of deductions really helps, IMHO. It would be nice if they offered the winners the trip or a significant fraction of it in cash. I love it when someone with $5000 plus the trip - you know they'll be able to afford the trip. Link to comment Share on other sites More sharing options...
Kirby Posted February 24, 2020 Share #11 Posted February 24, 2020 Another article on the topic. They indicate that trip values reflect the peak season but that the actual trips tend to have blackout dates. So if someone redeems a trip, they get taxed on the value on the dates they went, not necessarily the peak season value quoted on the show. The article also mentions that if a show is filmed in California, the contestants have to pay state taxes upfront too. https://www.marketplace.org/2015/01/20/winner-reveals-inside-scoop-game-show-prizes/ Link to comment Share on other sites More sharing options...
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