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Monday, January 29, 2007

IRS Grounds Prize Winner from Trip to Outer Space

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.)

http://taxprof.typepad.com/taxprof_blog/2007/01/irs_grounds_pri.html

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Comments

Now if we could just get the IRS to define the word "income" (which they cannot by the way), then things would be a lot clearer, and maybe, just maybe, coincidentally, everyone's dormant right brain would finally kick into gear, letting you all know how much you've been duped all these years.
The day that "income" or any other taxes are used for any public benefit whatsoever, will be the day the Tooth Fairy shows her face.

Posted by: Michael Miller | Jan 30, 2007 12:46:51 AM

I would pay $25,000.00 in a heartbeat for a trip into space.

Posted by: John Flynn | Jan 31, 2007 8:39:54 AM