TaxProf - Winners of 'Dinner with Obama" subject to $560 tax bill
http://taxprof.typepad.com/taxprof_blog/2012/06/dinner-with-.html
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 § 74 -- at the 35% rate, that results in $560 of federal income tax.
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 § 74 -- at the 35% rate, that results in $560 of federal income tax.
posted by tnj at 1:15 PM
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