Monday, January 29, 2007
The Associated Press reports that Brian Emmett has canceled the free trip to outer space he won as a prize in a contest run by Oracle Corp. because he would have to take the $138,000 value of the ride into income, resulting in $25,000 in taxes:
Since the IRS requires winnings from lottery drawings, TV game shows and other contests to be reported as taxable income, tax experts contend there's no such thing as a free spaceflight. Some contest sponsors provide a check to cover taxes, but that income is also taxable.
(Hat Tip: Gerry Beyer.)