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post #31 of 48
Quote:
Originally Posted by alexzn View Post

This whole thread is utterly disgusting, actually. So, he won a once on a lifetime dream trip and now he is trying to f&ck the federal government over it.... and doing it openly in the Internet forum.


The government that has both hands shoved into your pockets at every stage of your life? The taxation of non-monetary prizes is one of the ways that the government sucks the joy out of life. It'd be one thing if he had the option to get the cash value or sell the trip, but the kid is right: $3,500 may be cheap for a weeklong heli-skiing trip but it's a lot of money for a single vacation, especially for someone just starting out. Some people don't spend that for an entire year of vacations. If there's a semi-legit way to cut down on that cost (e.g. giving them the lowest possible cost), don't see what he's doing wrong. In fact, I bet you, like anyone, give the least amount of money you can on your taxes each year.

post #32 of 48
Quote:
Originally Posted by kimchijajonshim View Post

Yea, I'm definitely looking into that possibility. I'm not entirely sure how the IRS would handle that since it's a different location and a different provider, but I may be able to argue the point and knock a bit off the claimed value of the trip.

 

As for sharing the trip, if it's a buddy it'll be 50/50. If I end up "selling" the extra spot though, I don't have any qualms asking for a bit extra to cover the costs.


Just auction that seat off on here; problem solved.

post #33 of 48
Hey now. Do we need to move this to the politics section of the supporters' lounge?

wink.gif
post #34 of 48
Quote:
Originally Posted by JoeUT View Post

The government that has both hands shoved into your pockets at every stage of your life? The taxation of non-monetary prizes is one of the ways that the government sucks the joy out of life. It'd be one thing if he had the option to get the cash value or sell the trip, but the kid is right: $3,500 may be cheap for a weeklong heli-skiing trip but it's a lot of money for a single vacation, especially for someone just starting out. Some people don't spend that for an entire year of vacations. If there's a semi-legit way to cut down on that cost (e.g. giving them the lowest possible cost), don't see what he's doing wrong. In fact, I bet you, like anyone, give the least amount of money you can on your taxes each year.

Whatever, but I'd expect the only two questions to come from this opportunity should be: (1) who do I go with, and (2) what ski (board) should I take.  Life is too short for everything else. 

post #35 of 48
Quote:
Originally Posted by alexzn View Post

Whatever, but I'd expect the only two questions to come from this opportunity should be: (1) who do I go with, and (2) what ski (board) should I take.  Life is too short for everything else. 


And I see just one answer: 1) whoever can pay for his out of pocket expense, and 2) rent whatever is recommended for the day (keep in mind answer 1)

 

Life is simple, no need to complicate it. ;-)

post #36 of 48
Thread Starter 

Quote:
Originally Posted by SpikeDog View Post

So how did you win a AK heli trip, anyway?  Was it a lottery type deal, or did you eat 60 hot dogs in 2 minutes?

Warren Miller raffle.

 


Quote:
Originally Posted by gramboh View Post

If you are at all an avid skier/boarder you are insane not to take an 8 day CPG trip @ $3.5-4k, that is clearly a once in a lifetime opportunity. I would also try to work with CPG to figure out if you can be invoiced for as low a cost as possible (maybe in exchange for a better tip to the guides?). I cannot fathom only doing 2-3 days to save a few grand, and this is coming from a professional who started out at $34k annual salary out of university. I would have done whatever it took to make the trip happen at that price, just curtail your lifestyle spending for a few months to make up the difference.

 

Not sure how taxation of prizes works in the US, I assume the vendor is obligated to provide you with an invoice stating the retail value, and also report to the IRS for their corporate tax deduction?

 

Edit: If they don't provide an invoice, I would claim $5k value and wait and see if they audit you, at least it's a reasonable argument to make.

 

Thanks for the insight. I'm probably going to split the difference and go with the 6 day package instead of the 8 unless I auction the other seat off and the person's basically willing to cover the costs. As much as I'd love to go with the full 8 days, the additional cost of those two extra days looks like it would cover my local pass costs + gas costs for an entire season.

 

And yes, you're exactly right on how the prize money is taxed. They claim it as a deduction, I have to list it as miscellaneous income.

post #37 of 48

The US tax system sounds like its a mess

post #38 of 48
Quote:
Originally Posted by veteran View Post

The US tax system sounds like its a mess

This part of the tax system actually is not really the messy part that people speak of.

 

The messy part is the hidden complex loopholes where individuals or corporations that have the funds are able to take advantage of the complexity over the average person that doesn't have those resources.   

Same could be said for the legal system.  

 

In both cases, there is an entire industry which is largely based to guide people through the complexity of the system, and adds no real value to the universe other than to interpret or guide their clients through complexities that our society has self-created.

 

But, at least we don't have VAT or whatever the heck that is.

post #39 of 48
Quote:
Originally Posted by kimchijajonshim View Post

Just wanted to clarify a couple things: 

 

The 35% tax rate (actually 33% tax rate) is 25% to US government and 8% to California. Those levels start around $35,000 a year... so no, not quite the rich man's "lambo" problem. I'm comfortable but I'm not rolling in it, especially considering Bay Area cost of living and student loans.

 

The other thing is that I have no familiarity with this market whatsoever. I vaguely remember some provider was selling 25k of vert for $1000 at Costco a few years back. I have no idea if these sorts of trips show up on discount travel sites where I could conceivably get a similar trip for the same ballpark a few years down the road when I'm more settled financially.


The value is not going to be what you find at Costco.  It is what the trip provider assigns.  Example, early in my career (CPA) I was a controller for a car dealership, the sales folks all got good 'spiffs" from the manufacturers during sales events.  I once got a small electronic address book for having my reports in on time or something like that.  AI think at the time, late 80's,  I probably could have found the equivalent in a store for under 100 bucks.  I got a 1099 that year from Toyota for something like 500 dollars as the "value" of that device. 

 

So, my advice is don't try to figure it out by any logical means, just ask the question...."what is the value you will assign to this trip for one...now how about two?"  and plan from there.  It is going to be a whole lot higher than you expect.

 

 

Also, you are way high on your estimated rate, 2013 tax rates for single don't exceed 25% until taxable income exceeds 87,000 and don't get to 33 until just over 111,000.  If you are married, the table is even higher, not getting higher than 25% until the mid 140's and don';t hit  33 until 223K. tack on teh 8% top CA and a better estimate is not more than 23%, use 25 for ease of calculation.

 

Still if we use your 20K as value for 2 that's about $5,000 that you may need to save in the next 15 months or 300 a month.


Edited by skier_j - 1/30/13 at 6:42pm
post #40 of 48
Quote:
Originally Posted by JoeUT View Post


The government that has both hands shoved into your pockets at every stage of your life? The taxation of non-monetary prizes is one of the ways that the government sucks the joy out of life. It'd be one thing if he had the option to get the cash value or sell the trip, but the kid is right: $3,500 may be cheap for a weeklong heli-skiing trip but it's a lot of money for a single vacation, especially for someone just starting out. Some people don't spend that for an entire year of vacations. If there's a semi-legit way to cut down on that cost (e.g. giving them the lowest possible cost), don't see what he's doing wrong. In fact, I bet you, like anyone, give the least amount of money you can on your taxes each year.

 

And this is why I love Canada....no tax on winnings...don't even have to claim it as income for the year. We only have to pay taxes on the income earned from the interest on cash winnings, but you only have to pay it when you withdraw the money.

post #41 of 48
Quote:
Originally Posted by mvarley84 View Post

 

And this is why I love Canada....no tax on winnings...don't even have to claim it as income for the year. We only have to pay taxes on the income earned from the interest on cash winnings, but you only have to pay it when you withdraw the money.


That sounds about right to me. I don't really have a problem with taxing cash winnings, particularly large ones like the lottery, but I think taxing non-cash prizes is just an imposition. Instead of actually winning something, you may just get to pay for something you didn't want or need anyway.

 

Once again, Canada gets it right!

post #42 of 48
Quote:
Originally Posted by JoeUT View Post


That sounds about right to me. I don't really have a problem with taxing cash winnings, particularly large ones like the lottery, but I think taxing non-cash prizes is just an imposition. Instead of actually winning something, you may just get to pay for something you didn't want or need anyway.

 

Once again, Canada gets it right!

 

Well, both contests are the same, otherwise the contest holders will just give you "contestbucks" redeemable for the actual money which then only has the purpose of avoiding taxes.  You either tax all contests or none to be consistent.  You can't go around saying this qualifies but that doesn't; then smart people push up to the line to find the loopholes that you then have to close.

 

The problem here, is that the contest holder did not also give a cash portion of their prize to cover taxes, so they half-assed it.

I recall a  Vail Resort ultimate grand prize contest of up to 100days of lodging/skiing at any vail resort last year.  Within the fine print, it included around $25k portion in cash, for the intention of covering taxes.  So for all the badmouthing about vail being an evil profit machine,, at least they run a contest properly.

 


It would be like having a contest for 50% off a trip.   Or a drawing for "You win a new car*" (asterisk: for 2months, mandatory maintenance fees apply).

post #43 of 48
Quote:
Originally Posted by raytseng View Post

 

Well, both contests are the same, otherwise the contest holders will just give you "contestbucks" redeemable for the actual money which then only has the purpose of avoiding taxes.  You either tax all contests or none to be consistent.  You can't go around saying this qualifies but that doesn't; then smart people push up to the line to find the loopholes that you then have to close.

 

The problem here, is that the contest holder did not also give a cash portion of their prize to cover taxes, so they half-assed it.

I recall a  Vail Resort ultimate grand prize contest of up to 100days of lodging/skiing at any vail resort last year.  Within the fine print, it included around $25k portion in cash, for the intention of covering taxes.  So for all the badmouthing about vail being an evil profit machine,, at least they run a contest properly.

 


It would be like having a contest for 50% off a trip.   Or a drawing for "You win a new car*" (asterisk: for 2months, mandatory maintenance fees apply).


I'm not sure why you can't. If you win a car, you don't have any more money than you had before. The government is going to tax you when you sell your old car to make room in your driveway for the new car. They're going to tax you if and when you decide to sell that new car. So why should they tax the damn car? If it happened to me, I'd love to send them the rear passenger seat for their share.

 

This thread is a perfect example of how it f's up an otherwise great thing. If you win money, you have money to pay. If you win something else, you don't.

post #44 of 48

How would you then evaluate a contests where the prize is  we pay your credit card bill this month?  

Or here is a debit card with $10k on it that you can spend on items.

You got the goods you bought with the card, so it's not cash, but is just about the same as cash.

Every contest holder should give the prize in form of gift or debit cards then to help the winner avoid taxes.

post #45 of 48
Quote:
Originally Posted by raytseng View Post

How would you then evaluate a contests where the prize is  we pay your credit card bill this month?  

Or here is a debit card with $10k on it that you can spend on items.

You got the goods you bought with the card, so it's not cash, but is just about the same as cash.

Every contest holder should give the prize in form of gift or debit cards then to help the winner avoid taxes.


Easy, both of those are money. A $10K debit card is $10K that you would otherwise be spending out of pocket. Use at least part of it to pay expenses, and you have extra money you can pay the taxman. Same thing with the credit card example - you don't have to pay your credit card bill, so you have extra money, of which the taxman can take a cut.

post #46 of 48

The h&g tv "dream home" sweepstakes includes a big slug of cash.  They don't say it is for taxes, but I'm sure that is the idea.

post #47 of 48
Quote:
Originally Posted by JoeUT View Post


That sounds about right to me. I don't really have a problem with taxing cash winnings, particularly large ones like the lottery, but I think taxing non-cash prizes is just an imposition. Instead of actually winning something, you may just get to pay for something you didn't want or need anyway.

 

Once again, Canada gets it right!

I've known two people that won cars, one in a charity golf tourmney,a hole in one for a Grand Cherokee, the other was a Corvette and I don;t recall now how.  No matter, each had the sponsoring dealership sell the vehicle for them so they would have cash for the tax bite...neither left the showroom, neither was registered yet, somehow, the prize value was significantly greater than the amount received from the dealers.  They certainly got enough and then some to pay the taxes so they each did come out ahead cash wise.

 

I agree with JoeUT on the non cash winnings.  

post #48 of 48
Quote:
...No matter, each had the sponsoring dealership sell the vehicle for them so they would have cash for the tax bite...neither left the showroom, neither was registered yet, somehow, the prize value was significantly greater than the amount received from the dealers.

 

In this case I think you could make a fair argument that the actual 'value' of the car for tax purposes was the amount that the dealer was able to sell it for on your behalf, not the MSRP of a brand-new car (which nobody ever fully pays anyway).

 

You can argue that taxing 'income' is the wrong way to structure taxation in general.  But if you're going to tax 'income' and tax prizes then it makes sense to tax non-cash prizes the same as cash prizes.  Otherwise people will just find loopholes to avoid paying the taxes on what are effectively cash prizes.

 

If you argue that having 'stuff' isn't the same as having 'money', consider that you can borrow money against your assets (like with a home equity loan).  They have some (potential) 'cash value' even if you don't sell them.

 

This probably doesn't help the OP, but if he still needs a ski partner for his trip...

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