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

[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 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 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 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

[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.