Discussion:Bartering of prize
From TaxAlmanac, A Free Online Resource
Note: You are using this website at your own risk, subject to our Disclaimer and Website Use and Contribution Terms.
From TaxAlmanac
Discussion Forum Index --> Tax Questions --> Bartering of prize
| 14 May 2007 | |
| Does anybody else watch Survivor? A contestant won a $50,000 truck, but then immediately traded the truck with another contestant for that contestant's promise to give him an immunity necklace. Some columnists have asked the 2nd contestant, who ended up with the truck and didn't give the immunity necklace as promised, how he plans to pay the taxes on the truck. How many think that the first contestant who won the truck and then traded it will be responsible for the taxes on the prize? What about the immunity necklace that the first contestant traded for and didn't get? Is there a loss? Is there a gift issue? In light of Survivor alumni Richard Hatch being found guilty of tax evasion I thought IRS might be looking at these contestants pretty closely to make sure they're in compliance and reporting all prizes. Just wondering--it has no bearing on me personally of course. | |
| 15 May 2007 | |
| I don't watch survivor but I thought it was an interesting question. I think it hinges on is this a trade/business or is this recreation for the contestants. The first contestant is going report income for the truck either way. If they have a profit motive for being on the show and they should take a deduction for trading the truck on schedule C. If this is purely recreational they would still report the income from the truck but the deduction would be on schedule A subject to 2%. I would lean toward this being a trade or business. They are on this show to make money and trading the truck was an atempt to increase profit. | |
| 16 May 2007 | |
| I say it is income to the truck winner and the truck winner has to pay a gift tax as they gave up something and received nothing in return
Dusty | |
To join in on this discussion, you must first
log in.
