NSRA Give Away Car
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NSRA Give Away Car
Posted: August 09 2003 09:14 AM
 
John Bergman (aka jbergman) [ View ] [ ] [ Car Ads ] [ Blogs ]
Waterloo, Illinois
(618) 939-7321
 
I was wondering about the whole process of winning the car. Does anyone know what the value is on the car and how they come up with it. I guess you have to report the value as income? And also have to pay sales tax when you license the vehicle. Any info would be appreciated. Thank you!
 
 
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Posted by maniac  -  08/04/2003 08:37 PM

Now I'm not positive on this but I heard the manufacturers that donate the parts write them off at list price, and that it is added into the labor which is donated and thats how they come up with this value. Again I'm not positive about this, also I would imaigine you would need a value to give to DMV to get it registered.



Also if you notice I think the shades of the past run at Pigeon Forge gives away an unfiinished car for the reason of being cheaper to do and cheaper to deal with the tax stuff.



And yes it would be considered income, almost like an inheritance.
maniac [ View ] [ Email ] [ Blogs ] [ Car Ads ] Bethel, Connecticutt
 
Posted by 31tudor  -  08/05/2003 03:09 PM

It's no different than winning say $50,000 on the lottery or in a casino... plan on giving roughly 40% (depending on your tax bracket) of it to the IRS at tax time. The people sponsoring the contest must report it to the IRS along with all of the information or the recipient. It doesn't matter if the car is finished or not, it's a gift/inheritance/prize and is absolutely considered income. The IRS isn't fooled by a "partially completed" car because the sum of all of the parts still has a notable value.



If you win a car valued at $50,000, you've just increased your yearly income by $50,000.



Winning may push you into another tax bracket, among other federally regulated nightmares. Plan on giving roughly 40% of the value of the car to the IRS... they don't care that it's a car and not cash, it's income and they want their share.



See, if companies are donating parts to the project, they write them off as advertising expenses. The sponsor of the car (even if they buy parts) don't pay taxes on the parts because they are considered "for resale." All of the money that the sponsor collects while selling raffle tickets is taxable, though.



I can tell you right now that if I won a $50,000 street rod I couldn't pay for the tax hit I'd take at the end of the year! I'd probably have to sell the car just to pay the taxes on it. Winning just about anything would push me into the next tax bracket, and cost me more money than it'd be worth to keep it. As much as it'd kill me to do it, I'd probably put the car up for sale for $40,000 and take the first $35,000 offered. Somebody would get a killer deal on a rod, and I'd pocket several thousand dollars out of it. Maybe this is why you see so many "give-a-way" cars for sale just a few months after they've been awarded.



Hardly seems worth winning a prize, doesn't it? Cash isn't much better, as most people blow the money within a week, and have nothing to pay the government at tax time. It's a lot of fun, but in the long run it kills them financially.
Eric Hibbs [ View ] [ Email ] [ Blogs ] [ Car Ads ] St. George, Utah Charter Member since January 2002
 
Posted by BigAlBre  -  08/05/2003 04:10 PM
We had a chance to speak with the winner of this years' car and hope to secure an interview with him in a week or two to get his impressions and views on the subject.
Big Al sittin back pickin & grinning in paradise. [ View ] [ Email ] [ Blogs ] [ Car Ads ] Saint Petersburg Beach, Florida Charter Member since June 1999
 
Posted by jbergman  -  08/09/2003 09:14 AM
I have to agree it would be nice to own one of the give away cars but I would also have to sell in order to pay my debt to the federal goverment. I will look forward to the interview. Thanks!
jbergman [ View ] [ Email ] [ Blogs ] [ Car Ads ] Waterloo, Illinois
 
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