no sales tax is going to be collected...there's no sale! :smash:

That is not necessarily true. I agree that it shouldn't be...depends on the state you win it in.

One can always donate the winning car to a 501(c)(3) charity and offset the income as a deduction in the year of the winning assuming the fair market value of the car does not exceed 50% of your income.

Ok, you win it, give it to me and I will pay the taxes!! Pluss give you the price of your ticket back...even though its probably tax deductable!!
I like the sun comment , smiles

In Obama's America that is NOT FAIR!

You gotta pay-bottom line! Nobody gets something for nothing=duh?:lol:

:withstupid:

Apparently the person who wrote this didn't attend your class :thumbs:

The NCM will collect a 25% fee upon delivery.

http://www.corvettemuseum.com/raffle/rules.htm

The 25% tax is calculated on the "cost" of the car that the museum is charged. It is not MSRP. They are charged a cost from GM that is specific to the car, the model and the options that is included in the particular drawing that the museum happens to be doing at that time. The winner will be informed of what the tax basis is and what the fee is that they will need to provide.

The IRS guideline that specifies that the organization conducting the raffle for a prize greater than $5,000 is OBLIGATED to collect the taxes. The NCM had to apply for a Charitible Gaming License in order to conduct these raffles. Based on the below IRS guideline that they have NO choice but to collect the money UP FRONT:

Federal Income Tax Withholding: Charity Game Ticket Prizes

IDENTIFICATION: The winner of a single charity game ticket prize of $600 or more must provide the organization with proper identification. Two types of identification (e.g. driver license, social security card, voter registration card, etc.) should be furnished by the winner to verify his or her name, address, and social security number (SSN).

W-2G: If an organization awards a single charity game ticket prize of $600 or more, they must file Form W-2G.

WITHHOLDING: It is important that organizations understand the difference between "regular gambling withholding" and "backup withholding" of federal income tax.

The "regular gambling withholding" rate is 25% of a prize.

If an organization awards a single charity game ticket prize with a value between $600 and $5,000 and the prize winner provides proper identification, no withholding is required.
If the prize amount is more than $5,000, the organization must obtain proper identification from the winner (as described above) and withhold 25% of the prize. If the organization is unable to obtain proper identification, they must withhold the higher "backup withholding."
The "backup withholding" rate is 28% of a prize.

If an organization awards a single charity game ticket prize of $600 or greater and the prize winner fails to provide proper identification, the organization must retain the "backup withholding of 28%."
EXAMPLE: Organization XYZ paid a prize of $1,300. The winner would only give his name as J. Doe and did not provide proper identification. Organization XYZ should collect backup withholding of $364 ($1,300 x 28%), pay the winner $936 ($1,300 - 364), and file Form W-2G. If the winner had provided XYZ with proper identification (including social security number), no withholding would be required; however, the organization would still be required to file Form W-2G.

SINGLE PRIZE: The IRS considers all prizes won by one wager a single prize.

LIABILITY: The organization is liable for paying the applicable backup withholding to the IRS, regardless of whether or not it is collected from the prize winner. The best time to collect backup withholding is before the prize is paid! Organizations must report withholdings on Form 945 by January 31 of the following year.

:iagree::iagree::iagree: