We've all heard about Oprah giving away free stuff to her TV show's audience, like cars and (recently) iPads. Don't the audience members have to pay taxes on the things she gives them?
Are Oprah's gifts (to audience) taxable?
- Thread starter Mr. Laser Beam
- Start date
I believe it depends on the cost of the gifted item. At a certain price point, it becomes taxable income.
I'm pretty sure it's $600 in value or over that are taxable; and the corporation giving the prize (in this case Harpo) has to report giving it as a prize and to who it went, so the IRS will send the winner a tax form for it.
Exactly. Wouldn't she have already paid taxes when she bought item originally?
I think it depends. If it's something like a car, in the case of the new VW Beetles she recently gave away, I think either Harpo or VW chose to pay the taxes for them. But I'm not sure how legal that is, as I think they'd still have to pay taxes.
Exactly. Wouldn't she have already paid taxes when she bought item originally?
That would be “sales tax” on the sale to Oprah, not “income tax” to the recipient.
There are specific rules about tax on gifts--I don’t know what they are at the moment. But taxation is very statutory--a rule for everything.
If Oprah gives away the cars, then also gives the recipient the money to pay the tax, that money is itself taxable, AFAIK.
Winning can be so complicated. Yeah, that's the way I saw it explained somewhere too. I guess in the end, it means that Oprah's coverage of the taxes is only up to a certain extent, with the recipient having to pay the rest. But I'm wondering if this has anything to do with where a person resides. For example, Canada has very different rules on winnings and taxes, We essentially don't pay many taxes when winning the lottery for example, so it sounds to me like the rules in effect are the rules where the prizes were given.
I remember hearing that when she gave away those cars a few (2004?) years a go that the audience had to pay taxes on them. and some were pissed.
I'd think it was a deal, you'ld be getting a new $28,000 car for a fraction of the sticker price.
here are some google answers
Link 1
Oprah audience finds that free gift comes at a cost
I'd think it was a deal, you'ld be getting a new $28,000 car for a fraction of the sticker price.
here are some google answers
Link 1
Oprah audience finds that free gift comes at a cost
Yeah, you have to pay income taxes things like gameshow winnings. Oprah's gifts are a bit harder to say. They're either subject to income taxes of gift taxes, but I'm not sure which. I think income taxes are less severe (and paid by the recipient, not the giver), so I'm sure they'd rather classify it that way.
Apparently, Extreme Makeover Home Addition found a loophole in the tax code that allows them to give the recipient an increase in their home value with no taxes. I can't remember the details, but it has something to do with allowing you to rent your home for a week or less without owing anything on the income. The show "rents" your home for a week and "pays" you in home improvements.
Apparently, Extreme Makeover Home Addition found a loophole in the tax code that allows them to give the recipient an increase in their home value with no taxes. I can't remember the details, but it has something to do with allowing you to rent your home for a week or less without owing anything on the income. The show "rents" your home for a week and "pays" you in home improvements.
Don't a lot of the Home Makeover people end up eventually getting screwed in property taxes? Suddenly, their 1000 sq. ft. house is now 5x as big and worth 5x as much, thus jacking up their property taxes to a level that some cannot afford?
I'm not sure. The point is they would have been screwed just on the creation of the house if it weren't for a tax loophole and (apparently) an IRS that is willing to let it slide rather than screw over the truly needy that the show tries to help.
Now if they get screwed in property taxes as well, that sucks. Hopefully they're able to balance it out (they got necessary improvements often and the money they saved can go to the taxes).
Now if they get screwed in property taxes as well, that sucks. Hopefully they're able to balance it out (they got necessary improvements often and the money they saved can go to the taxes).
This is another reason we should do away with income tax, and go to a federal sales tax on consumption. Oprah would buy a car and pay the sales tax then give it to whoever she sees fit, one citizen (or group of citizens) should be able to give a gift to another citizen without the government being involved.
If they just taxed Oprah herself on her massive ego alone, they could wipe out the federal budget deficit in a year. 
And people who can save just enough to buy a car now won't be able to pay for that car. Oprah doesn't supply most Americans with cars. I think the people who get them from her can live with the income tax or can disclaim the car. You don't want to pin your argument for creating an extremely regressive tax based on what Oprah does.
Wasn't this the subject of controversy a couple years ago when she first gave away the free cars that the taxes weren't paid on those vehicles and when it was finally brought to Oprah's attention she paid them? Remember reading responses from people who were beating up her accounting department or whoever would be responsible for that blunder in the first place. I would think now that Harpo would take care of any taxable costs so's as to not screw over the audience and create any negative press.
The taxes the corporations pay are already factored into the price of the car, but it wouldn't really matter because most people don't care what the car costs, just what the monthly payment is going to be.
What taxes the corporation pays? You were talking about sales taxes paid by the consumer. The price is pre-tax (both state and national).
I thought the gift tax was for over $10,000 dollars--whether in cash or purchases. For our wedding, we got 10,000 from my parents, and they didn't have to pay taxes on it, or notify the IRS.
