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Tuesday, September 14, 2004

Tax Consequences of Oprah's Car Giveaway

Tuesday, September 14, 2004

Photo of Oprah's AudienceThe TaxProf Discussion List was abuzz yesterday with news 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. What caught the eye of Michael Kirsch (Notre Dame) was this statement by a spokesperson for Pontiac (which donated the cars) in an AP story: "Pontiac will pay for the taxes." What "taxes" is Pontiac talking about? If federal income taxes, how will Pontiac value the car? Presumably at something less than the $28,400 MSRP, but how much less? How will Pontiac figure out the appropriate tax rate for each individual audience member?

After a spirited discussion, later press reports clarified that Pontiac is only paying the sales tax on the cars, thus obviating the interesting issue of the proper gross-up amount (but leaving the valuation issue).

http://taxprof.typepad.com/taxprof_blog/2004/09/tax_consequence.html

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» EVERYBODY GETS A CAR! EVERYBODY GETS A... from Michelle Malkin
...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... [Read More]

Tracked on Sep 23, 2004 11:16:48 PM

» EVERYBODY GETS A CAR! EVERYBODY GETS A... from Michelle Malkin
...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... [Read More]

Tracked on Sep 23, 2004 11:19:47 PM

» Consequences of Oprah's Car Giveaway from WOLves
At the TaxProf blog and the Wall Street Journal they're talking about the taxes on big prizes like "free" cars. Well, even that's not all. My late mother used to enter contests as a hobby, and among the dozens she [Read More]

Tracked on Sep 24, 2004 12:30:35 PM

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