FPP porsche- taxable?

[DDBeast]

Do you have to pay tax on the Cayman S if you buy it with with FPPs at Stars?

[fnord_too]

yep.

[DDBeast]

It's not considered a gift?

[Legislurker]

Gifts are taxable here in the hegemon of the free world. We left hospitality behind in the Middle Ages.

[Russ Fox]

In almost all cases, gifts are not taxable to the recipient. (They can be subject to the Gift Tax and/or necessitate filing a Gift Tax return, but the Gift Tax and/or Gift Tax Returns are paid by/filed by the giver of a gift, not the recipient.)

Note that I am not saying that a Porsche redeemed with FPP is a gift....

-- Russ Fox

[DeadMoneyDad]

[ QUOTE ]
Do you have to pay tax on the Cayman S if you buy it with with FPPs at Stars?

[/ QUOTE ]

A good argument could be made that you have earned it. I'm not sure of the exact tax laws but it is similar to discounts or items redeemed in a credit card rewards system IMPO.

So you've got a nice question for a tax professional.


D$D

[4_2_it]

Is rakeback taxable? [HINT: Answer is yes.]

This is no different.

[DeadMoneyDad]

Rakeback is a return of cost normally paid.

Loyality points are earned.

IMPO there is an argument to be made.

I didn't say you had a slam dunk winner just a decent argument.

As always consult a tax professional or TWO and your Lawyer before potentially taking on the IRS.

D$D

[4_2_it]

D$D,

So the argument would be that FFP redemptions are the same as someone getting a comped room or a free dinner at a B&M casino. Hmmmmm.......very interesting indeed.........

[LT22]

seems like FPP purchases could be a "benefit" or comp

do ppl pay income tax on health insurance paid for by their employer?

[Zele]

[ QUOTE ]

do ppl pay income tax on health insurance paid for by their employer?

[/ QUOTE ]

This is a bizarre exception to a fairly straightforward rule.

[FatalError]

[ QUOTE ]
D$D,

So the argument would be that FFP redemptions are the same as someone getting a comped room or a free dinner at a B&M casino. Hmmmmm.......very interesting indeed.........

[/ QUOTE ]

practical reasoning and the decision of an IRS audit do not always go hand in hand

as much as this logic makes sense i don't think this is going to fly, you weren't given a porche, you ordered one

[LT22]

[ QUOTE ]
[ QUOTE ]
D$D,

So the argument would be that FFP redemptions are the same as someone getting a comped room or a free dinner at a B&M casino. Hmmmmm.......very interesting indeed.........

[/ QUOTE ]

practical reasoning and the decision of an IRS audit do not always go hand in hand

as much as this logic makes sense i don't think this is going to fly, you weren't given a porche, you ordered one

[/ QUOTE ]

you also order your food or free drink at a casino from a variety of options

I'm really interested in a legal opinion on this issue

[Rampage_Jackson]

I don't know the answer. I just wish PokerStars would clarify it for us.

[broiler]

The credit card argument is comparing apples and oranges. In order to have a valid argument, you need to have an expense that was deductible for tax purposes that is not taxable when you receive a refund of that expense. Your personal credit card that gives cash back or some other point system is not taxable because the expenses on the card were never deducted.

Libutti v Commissioner holds that automobiles that were comped are income as gains from wagering transactions. The idea that the car is a comp is usually the other argument against treating the car as income.

The exclusion of the car as income needs an argument that is better than either of these two scenarios. The gift argument is even worse since the car is chosen by the player with the condition of playing. When cars are given to people with no play or expectation of play, then the gift argument could be revisited.

[iron81]

I found an article put out by the IRS that frequent flyer miles are not taxable. Stars FFP program seems analogous.

Linky (http://www.irs.gov/pub/irs-irbs/irb02-10.pdf)

[broiler]

The article does not say that frequent flyer miles are not taxable. The paragraph merely says that the IRS will not assert that a taxpayer has understated their personal taxes for the personal use of miles related to a business.

In an example for taxability, private letter ruling 9746048 required mutual fund buyers to reduce the basis of their shares by the FMV of the frequent flyer miles received.

[Jimbo]

[ QUOTE ]
So the argument would be that FFP redemptions are the same as someone getting a comped room or a free dinner at a B&M casino. Hmmmmm.......very interesting indeed.........


[/ QUOTE ]

Pretty sure these are also taxable in the USA.

Jimbo

[Dennisa]

Minimally, if you try to register the car in the US, a state is going to ask for a license tax registration and sales tax. They will most likely not issue plates until you pay the sales tax, and will charge you based on current Kelly Blue Book value. I believe Pokerstars has a disclaimer on their website that says they are not responsible for tax and license fees. Oh yes, I would not drive a Porsche without current tags.

[tmfs]

[ QUOTE ]
Minimally, if you try to register the car in the US, a state is going to ask for a license tax registration and sales tax. They will most likely not issue plates until you pay the sales tax, and will charge you based on current Kelly Blue Book value. I believe Pokerstars has a disclaimer on their website that says they are not responsible for tax and license fees. Oh yes, I would not drive a Porsche without current tags.

[/ QUOTE ]

I think the question is not fees associated with the car itself but the 80k or so paid for the car as taxable income.

[Tappy Tibbons]

[ QUOTE ]
It's not considered a gift?

[/ QUOTE ]

Remember a few years ago when Oprah Winfrey gave everyone in her audience a free car? They all had to pay taxes (http://money.cnn.com/2004/09/22/news/newsmakers/oprah_car_tax/index.htm) on the value of the car. So, even if it is a gift, you still have to pay taxes on it.

[jively]

[ QUOTE ]
[ QUOTE ]
It's not considered a gift?

[/ QUOTE ]

Remember a few years ago when Oprah Winfrey gave everyone in her audience a free car? They all had to pay taxes (http://money.cnn.com/2004/09/22/news/newsmakers/oprah_car_tax/index.htm) on the value of the car. So, even if it is a gift, you still have to pay taxes on it.

[/ QUOTE ]
That article says it was a prize, not a gift. If Oprah gave the cars to them with her own money, it would be a gift and not taxable. It looks like they were awarded from a company--maybe the company that produces the show.

-Tom

[DeadMoneyDad]

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
It's not considered a gift?

[/ QUOTE ]

Remember a few years ago when Oprah Winfrey gave everyone in her audience a free car? They all had to pay taxes (http://money.cnn.com/2004/09/22/news/newsmakers/oprah_car_tax/index.htm) on the value of the car. So, even if it is a gift, you still have to pay taxes on it.

[/ QUOTE ]
That article says it was a prize, not a gift. If Oprah gave the cars to them with her own money, it would be a gift and not taxable. It looks like they were awarded from a company--maybe the company that produces the show.

-Tom

[/ QUOTE ]

If Oprah really was so generous she would have made the cars gifts and paid the excess gift tax herself! The IRs would have come after her first!

http://www.irs.gov/publications/p950/ar01.html#d0e39

Making the gifts a "prize" her production company can write them off as an expense of the cost of production of the show. You don't amass her "bankroll" by being dumb. In this case everyone thinks she gave away the store when really her actual cost was likely very small if positive at all.


D$D

[Quanah Parker]

So, when will the Stars FFP store offer health care insurance?

[DeadMoneyDad]

[ QUOTE ]
So, when will the Stars FFP store offer health care insurance?

[/ QUOTE ]

I've often thought that the acturial stats on most poker players is pretty good compared to the average population. While the PPA has way too many other things to do right now, a PPA version of AARP's health plans would be worth running the numbers on. Given the young age of many players, and the health of most of the pros, they all combine might carry my fat old ass.

But then just another way to make a buck! I know if could be run for a profit.....


D$D

[popesc]

Even if Oprah did make the cars gifts, there is a limit to the amount you can give as a gift without paying a gift tax. The limit is $12K/person/year. IRS website (http://www.irs.gov/newsroom/article/0,,id=107815,00.html)

[crashjr]

[ QUOTE ]
Even if Oprah did make the cars gifts, there is a limit to the amount you can give as a gift without paying a gift tax. The limit is $12K/person/year. IRS website (http://www.irs.gov/newsroom/article/0,,id=107815,00.html)

[/ QUOTE ]

Not exactly. Anything over 12k/yr/individual requires an informational return and is charged against the giver's lifetime gift tax exemption.

[spino1i]

If you are smart, you have PokerStars make it a gift FROM a foreign entity. In that case, no gift tax applies. This special loophole is the cause of many tax breaks for rich tax-savvy people.

[smartalecc5]

[ QUOTE ]
If you are smart, you have PokerStars make it a gift FROM a foreign entity. In that case, no gift tax applies. This special loophole is the cause of many tax breaks for rich tax-savvy people.

[/ QUOTE ]

can someone confirm??

[DeadMoneyDad]

[ QUOTE ]
[ QUOTE ]
Even if Oprah did make the cars gifts, there is a limit to the amount you can give as a gift without paying a gift tax. The limit is $12K/person/year. IRS website (http://www.irs.gov/newsroom/article/0,,id=107815,00.html)

[/ QUOTE ]

Not exactly. Anything over 12k/yr/individual requires an informational return and is charged against the giver's lifetime gift tax exemption.

[/ QUOTE ]

Well it seems the cars we're NOT from Oprah: "During the show each member of the audience received a new G6 sedan; the 276 cars were donated by Pontiac as part of a publicity stunt" ref (http://en.wikipedia.org/wiki/Oprah_Winfrey)

Harpo Productions is an incorporated United States so getting them as a gift from Oprah would have been a little harder as Harpo would be involved. Well unless she had agreement from all the stockholders to utilize the individual gift exemption.

D$D

[Dennisa]

[ QUOTE ]


I think the question is not fees associated with the car itself but the 80k or so paid for the car as taxable income.

[/ QUOTE ]

Sales Tax, license and registration on an $80,000 Porsche are not minimal expenses either. In California, these fees could approach close to $10,000.

[CORed]

[ QUOTE ]
I don't know the answer. I just wish PokerStars would clarify it for us.

[/ QUOTE ]

And how would they do this? Read the minds of IRS employees?

[schwza]

[ QUOTE ]
[ QUOTE ]


I think the question is not fees associated with the car itself but the 80k or so paid for the car as taxable income.

[/ QUOTE ]

Sales Tax, license and registration on an $80,000 Porsche are not minimal expenses either. In California, these fees could approach close to $10,000.

[/ QUOTE ]

i remember reading a story that some financial company paid for all the taxes and stuff in the oprah case. realized now i quoted teh wrote post, but what the hell.

[Jimbo]

[ QUOTE ]
i remember reading a story that some financial company paid for all the taxes and stuff in the oprah case. realized now i quoted teh wrote post, but what the hell.


[/ QUOTE ]

No reason to doubt this happened but keep in mind if they did only this then you would still owe tax on the amount they paid, then if they paid this amount you would owe tax on the new payment they made on your behalf. This continues until the amount is down to mere pennies or else whoever this company is stops paying the never ending tax accumulation.


IE: You win $1000,000, the same company pays the $40,000 tax bill you owe on the $100K win, now you owe taxes on the $40K they paid and so on and so forth.

Jimbo