If you win a Viper, how do the taxes work?

[C O D Y]

With the Viper that is raffled off by the club, the amount is taxable with a w-2. So yes, you will have to pay tax just like it was income.

 

[SneakyPete]

you have to pay income tax (state and federal), sales tax and luxury tax on top of title, tag and registration.

You end up paying about $40,000 for a viper this way.

 

[Bonkers]

I was told that all additional income from awards, raffles, sweepstakes, etcetera was taxed at 28% of its VALUE unless you sell it (which then becomes income.)

For example, if I had won a new RT with an MSRP of $55,000 (save the flames I'm just guesstimating) and kept the car I would have to pay $15400 in taxes. If I sold the car at MSRP then I would have to claim my Income + 55K.

Have I been thinking about this all wrong?

 

[Rudeboy]

You are taxed at your tax bracket. The problem with winning a $70K car is that bumps you into the next tax bracket! And if you're luckier, you begin to reduce your ability to take deductions!

Still the cheapest way to a new Viper.

 

[Rudeboy]

One more clarification, since I know many of you love to gamble, a raffle win comes with a W-2G (Gambling Winnings) which can be offset by documented gambling losses in the same calendar year.

So save those lotto and ATM receipts, make sure your casino host can back your losses up, etc.

 

[Craig 201 MPH]

Man that sux, gotta live in Ontario for something like this. Only thing I would pay would be insurance and licensing. If you win $12M in the lottery here you get $12M, not $4M

Craig

 

[snakoil]

I'd rather get socked with income taxes than pay Canada's value added tax all my life on everything I buy. (VAT)

I think the phase out for deductions starts around $100-125K. It's a screamin' reamer tax that works in reverse! The more you make, the less the guv'mint thinks you should be able to deduct.