McDonalds Corvette

[Robert D.]

Does anyone know who won the black/red 1967 ? I think it went off Saturday night .
Bob

[John H.]

Re: McDonalds Corvette

Pat Bowman, Fountain Valley, California. Now all he has to do is write a $40K check to the IRS to pay the tax on it

[Charlie P.]

Re: McDonalds Corvette

I was just curious as to whether or not the various publications or other media where this auction was advertised donated the costs for same. I've never seen one specific charity auction so extensively promoted. Anybody know?

[Clem Z.]

Re: McDonalds Corvette

all these auctions inflate the price of the item and if you win you pay excess taxes,much more that the item is worth. a friend won a home valued at $300,000 and after all was said and done he said he would have been better off if he had taken the $50,000 cash instead.

[Randy S.]

Re: McDonalds Corvette

Are you serious about the $40K? I thought Cal sales tax was around 8 1/2%. Why 40K? The car value was listed as $125K

Randy

[Patrick H.]

Re: McDonalds Corvette

It's not sales tax, it's income tax. The Feds tax you on the $120k "income" you just received. And, they often make you pay up immediately.

Patrick

[Jack H.]

Tain't 'Income' -- It's A Capital Gain Issue... *NM*

[John Fowler]

Re: Believe it's income

Federal and state




Tax on raffles

[John H.]

Re: Tain't 'Income' -- It's A Capital Gain Issue..

Nope - as far as the IRS is concerned, it's "other (ordinary) income"; the raffle winner won't get the car until he coughs up the standard withholding amount, based on that percentage of the value assigned to the car, which the raffling agency has to forward to the IRS.

Our northern neighbors tell me there's no income tax in Canada on lottery winnings - don't know about raffle winnings, though.

[Patrick H.]

Wrongo, JH.

Capital Gains is the increased value when you sell an item vs. your cost basis of the item. So, if you have $60k into your 65 396 and sell it for $145k, you pay Capital Gains tax on the $85k profit.

A "free" car in a lottery is just good old income. And, if the car was advertised as being "worth" $145k, you just received a $145k income. 1099 here we come!

Patrick

[John H.]

Re: Wrongo, JH.

Yup, that's what I said

[Patrick H.]

Re: Wrongo, JH.

Yup. Just threw in the Capital Gain definition for him too.

Patrick

[Michael S.]

Re: Tain't 'Income' -- It's A Capital Gain Issue..

You have one option "before" take possession of the car. That is to have the car appraised by an enolled agent/appraiser that is registered with the IRS.

The BIG problem with these raffles is that the entity raffling the car "sets" the value that is reported to the IRS as asset value and then to you in the form of a "1099" form. This reported value may be accurate, too low or too high. Generally it's WAY TO HIGH. By having the asset appraised by an appraiser registered with the IRS you then will have an actual asset value on the date you won the asset and that is what your income will be on your 1099 form as reported to the IRS. Some charities or entities raffling the car will balk and squeal at your request however why should you pay income tax based upon an incorrect asset value???

Based upon the above you may very well be better off taking the cash value alternative. This really pisses the entity raffling the car off as now THEY has to deal with disposal of the prize, pay you money and generally get a LOT less money from their raffle than they originally anticipated.

Always do what's best for you and the raffling entity and do not get BS's into taking something you may not want or can afford! As a matter of fact you should consider this before entering a raffle. Being a winner may cause lot's of problems that you have never considered!!!!!

[Terry M.]

Be careful what you ask for....

You just might get it.