Sunday, August 25, 2013
Contestants on The Price Is Right may win big but may also be unprepared for the hefty taxes owed before receiving their prizes. Winners must pay California’s state income tax up front as well as federal income taxes. If the prize is large enough, it could even bump you into a higher federal tax bracket.
According to Andrea Schwartz, who won a Mazda 2 compact car, she had to pay $2,500 in taxes before she could claim the car or end up forfeiting the prize. Another contestant explains that once you get a call from the car dealership during the 90-day window, you only have 10 days to arrange the paperwork, pay the taxes, and go pick up your new car wherever the dealership may be.
Schwartz also won a pool table and shuffle board table, which she had to pay money to store and ship to another location due to the small size of her apartment. She had to sell the prizes because the show does not allow you to take the cash value of any prizes. That includes extravagant vacations, which contestants must also pay sales and income taxes on or forfeit.
See Sarah B. Weir, The Price Is Right . . . and the Taxes Are High, Yahoo! Shine, Aug. 19, 2013.
Special thanks to David S. Luber (Florida Probate Attorney) for bringing this article to my attention.