Oprahs Car Gift Backfires on some....

[rsmith6621]

http://aolsvc.news.aol.com/business/article.adp?id=20040923104409990014


I wonder if Oprah told them they would have to pay taxes to.....I guess she better pull out her check book again

[Kahuna]

1. There is no way out of it. If she pays the taxes they would owe..

even more taxes. Because they would be the recipient of another gift. Every adult person should be aware that if you receive a gift, money or prize you have to pay income taxes on them. I don't see what the bid hurrah is about. :shrug:

[northzax]

2. yeah, but then they'd have to pay taxes on that

it's a vicious cycle. but it's better than taxing rich people.

[mopinko]

3. i'm not sure, but

it was my understanding that gm donated those cars. the publicity value of that stunt was worth way, way, more than the cost of those cars. so maybe oprah should pull out the check book. they will have to pay taxes on that, too, of course. this is an old problem.

[Not Me]

4. I had read somewhere that she was covering the taxes too...

but even if not, income tax on $28,000 is still a deal. And the people always have the opportunity to shed the car and pocket the cash difference.

[bluestateguy]

5. I would just sell the car, pay the taxes and keep the cash

Still not a bad deal, but the whole thing is rather biased against people who do not have large liquid assets to pay the taxes.

[Samurai_Writer]

6. Why didn't she sell the cars for $1?

That's what we do when we have cars in the family we want to title over to someone else. Instead of 'gifting' them we sell them for $1, which avoids both sales and gift taxes.

[demon67]

7. Better check with your accountant

or your lawyer. I believe the recipient would be taxed on the difference between what he paid for the car ($1) and its fair market value.

[Tempest]

8. They have to pay federal and state income taxes on car

http://www.chicagosuntimes.com/output/roeper/cst-nws-roep20.html

Pontiac is covering the cost of the sales tax -- but the recipients of the cars are responsible for paying state and federal income tax.

Everyone's tax situation is different, but for a married mother of two who makes about $30,000 a year, getting that free car means you'll probably owe about $5,000 to $6,000 in federal taxes, and several hundred dollars in state taxes.

[Moderator]

9. Duplicate

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=102&topic_id=845510