Reply by AlaskaGuy

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Posted on Chance to win $11,000 shop from Popular Woodworking

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5984 posts in 3157 days

#1 posted 05-08-2018 05:49 PM

I would enter, but if I won I wouldn t know what to do with all of those power tools … LOL!

- Ron Aylor

You can add 11,000 dollars to your income and pay more taxes.

The downside of winning a high-priced item, like a car, is that you may have to sell it to pay the taxes or dip into savings intended for other purposes. You will have to pay tax on the fair market value of the item, so if you won a $50,000 car, you’ll owe taxes on that amount. The company providing the winning item should send you a Form 1099 with its fair market value. Again, the prize may move you into a higher tax bracket, so make the same computations as if it were cash. For example, if you are in the 28 percent tax bracket with the car included, a bracket that currently ranges from $91,900 to $191,650, you’d pay $18,713.75 plus 28 percent of the excess over $91,900 for tax year 2017.

-- Alaskan's for Global warming!

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