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Game Show Vacation Prizes


MickinMD

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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!

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49 minutes ago, bikeman564™ said:

All products are based on MSRP, but trips? I have no idea :dontknow:

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?

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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.

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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.

 

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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.

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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/

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