Sunday, June 24, 2012
Winners of 'Dinner With Barack' Will Face a $560 Tax Bill
William Jacobson (Cornell) blogs the tax consequences of the Obama campaign's Dinner With Barack fundraising raffle. Three winners and their guests will receive:
- Roundtrip airfare (valued at $1,200)
- One night in a hotel ($200)
- Dinner with President Obama ($200)
The rules state that "all federal, state and local taxes associated with the receipt or use of any prize are the sole responsibility of the winner." The $1,600 is includible in each winner's income under ยง 74 -- at the 35% rate, that results in $560 of federal income tax. (Hat Tip: Greg McNeal.)
https://taxprof.typepad.com/taxprof_blog/2012/06/dinner-with-.html
Comments
There is a simple solution for obama to make this a real prise, and not a curse. Add enough cash to the prise to pay any tax on the non cash portions. Of course the cash would also be taxed, so they would have to add cash, plus tax on the cash. It might be amusing to see the Obama campaign paying taxes on this. Of course we know they will never do that. The poor sap that wins, will just get stuck with the unexpected tax bill. Kind of a symbol of Obamas whole policy, they pretend to give us free stuff, and we get stuck with the bill for it.
Posted by: richard40 | Jun 26, 2012 3:02:12 PM
Bring your own paper sporks. No knives or forks allowed in the hands of peasants in the presence of the cowardly lier.
Posted by: SC88 | Jun 25, 2012 9:11:51 PM
Alternately, isn't allowing resident aliens to enter tantamount to soliciting contributions from non-citizens?
Posted by: PersonFromPorlock | Jun 25, 2012 3:56:13 PM
Is it *legal* to exclude non-residents from the contest? Apparently it's not a matter of keeping non-citizens from contributing to The One's campaign since you (theoretically) can win without contributing anything.
Posted by: PersonFromPorlock | Jun 25, 2012 3:51:30 PM
The "winner" is probably going to get stuck with the check for dinner, too.
Posted by: malclave | Jun 25, 2012 2:46:54 PM
For the meal, be sure to bring along your own silverware that you got as wedding presents...and give it to Obama to melt down. -- Barack Obama to Couples: Ask for Campaign Donations Instead of Wedding Gifts
Posted by: Woody | Jun 25, 2012 2:13:49 PM
Common Sense,
Didn't you send enough box tops to personally meet your Saturday Morning cartoon Hero?
If sense ever becomes common the Democratic Party will go extinct.
Posted by: edward1960 | Jun 25, 2012 2:11:20 PM
Whoever "wins" should just sell off the seat and make a killing on it.
Posted by: Kaitian | Jun 25, 2012 9:57:28 AM
Since this is another "Take a peasant to lunch" lottery, like Anna Wintour's, it's unlikely the winning peasants will be at the 35% tax rate.
If I were the winner, when I filed my taxes, I'd challenge that valuation of "Dinner with President Obama -- $200." Is that really a fair market value? Depends totally on what they serve.
Posted by: Larry E | Jun 25, 2012 9:17:44 AM
I think this blogger may have undervalued the dinner with obama. Recently, a group of the "correct 1%" paid $40,000 a piece to dine with barry-boy. So, this tax bill may be considerably higher.
Posted by: keymanjim | Jun 25, 2012 8:24:02 AM
Have you ever heard of someone winning something (Lottery, Raffle, prizes on The Price Is Right) without having to pay tax? This has been the norm for years so why would it be any different now? Come on, they are following the law. This is just another situation to twist, spin, flip, or blow out of proportion. And for what? This misinforms people and boasts half truths which is good for no one.
http://voices.yahoo.com/federal-income-tax-prizes-8796923.html?cat=3
Posted by: CommonSense | Jun 25, 2012 8:15:22 AM
I'm sure that someone in this administration will issue a waiver (for a modest price).
Posted by: TexEd | Jun 25, 2012 7:12:00 AM
Just like when OPRAH handed out new cars to the members of her audience and the idjits didn't understand they we're on the hook for a minimum of $ 4000 each in taxes based on " winning" those cars......OPRAH and OBUMMER are two of the same type....EPIC FAILURES who suck people in.....guess BT Barnum was right.....
Posted by: Middleboro J | Jun 25, 2012 7:07:58 AM
Fair market value of the meal is $200.00?? What in the world are they serving?
Posted by: Ned C. | Jun 25, 2012 6:30:04 AM
Of course, this calculation assumes the "winner" will (a) actually have a job or other source of income (b) earn enough money to be in the 35% marginal bracket. If such a person is supporting Barack Obama, he or she deserves what they get.
Posted by: Buck O'Fama | Jun 25, 2012 6:22:20 AM
I signed up, so, what happens...all sorts of emails telling me how much Obama needs my help. That's why I signed up to meet him. Obama needs help all right - he needs my advice, not my money.
Posted by: Woody | Jun 27, 2012 12:13:02 PM