Lets say you win a new car

What  happens next ?  

I wonder if the taxes are higher - like sweepstakes tax rate or something I fabricated in my head.   

As far as I know, you're taxed on the value of the vehicle at your state's rate and it's yours.  Or you can sometimes accept a cash equivalent (and pay taxes on that) if that was one of the options in the rules of the contest.

Sidenote:  When I was in L.A. I worked briefly on the set of The Price is Right.  The statistic is that only about 20% of the contestants accept the gifts they win.  They take a cash value instead because A) the taxes on a car are pretty big, and B) the chances that you actually WANT the stripped down beige Kia Rio are pretty slim.  And do you really want a new Maytag washer dryer?  How about that Citizen watch?  Is it something you would have bought anyway?

When you see someone win a car, it sounds like a fun thing, but in reality the car is simply a product placement.  An advertisement for whatever car it is.  The company gets to have Drew Carey say nice things about the adaptive cruise control and power windows, and we all get to watch some housewife from Kansas go apeE36 M3 over a Ford.  It's powerful psychology, but often just smoke and mirrors.  We often re-used the same car three or four times.  It might have already been "won" by a contestant last week, but there it is, behind the curtain with a dead battery because we hadn't moved it for a week and someone left the interior light on.

The value of the car must be declared as income.   This is why most who win one will settle for cash payment of less then the value of the car.

I know someone who one a 7 series BMW that was valued at over $100,000.  They settle with the dealership who offered it for something like $60,000 in cash.  All of which, and more, I am sure has been returned to the casino they won it in.  One of the worst thing that can happen to a gambling addict is to win big.

I also used to know someone who won an MTV (it's this channel that used to show music videos.. people thought it was boss) contest for a futuristic electric car... build from a Fiero (yes it was a while ago).  It even had solar panels on the roof (likely provided a float charge at best).  He said, much to their surprise, he wanted the car.  The car was apparently, as you can imagine, rather a big turd.  I don't remember what the end result was, but I suspect it was some cash.

iceracer said:

What  happens next ?  

But the real answer is (depending on the car) we become besties?

Prize cars on Omaze right now include...

-Restomod Bronco
-Overland conversion Sprinter
-Challenger Demon
-911 Turbo S
-Civic Type R
-Mustang RTR

I'd be pretty tempted to keep one of those.

Honestly, there is no reason to keep the car unless you where planning on buying one (and like the color, options etc), and, for some reason, the car is not readily available.  If for nothing else, you will likely pay taxes on a the full retail value of the car, rather then the discount you would likely get (for less then rare cars).

I've won a Land Rover Range Rover HSE and a BMW M235.  There wasn't a cash option for the LR,  I took the car, paid title & registration fees, state sales tax and got a form 1099 for the value of the car (approx. $87K).  I drove it for a year and sold it for high wholesale price and still netted nearly $50K.   I took the cash option for the M235 and got a 1099.  I used that cash & couch cushion money to do Euro delivery on an f80 M3.     If you win the car in a raffle, the cost of the raffle ticket is deductible for tax purposes. 

To answer aircooled's question, if you can document that the car you win commonly retails for less than sticker, you can amend the value stated on the 1099 for your tax returns.

If you search my previous posts, from August or September of 2011, I posted about the LR win.  Lot's of fun comments.

nderwater said:

Prize cars on Omaze right now include...

-Restomod Bronco
-Overland conversion Sprinter
-Challenger Demon
-911 Turbo S
-Civic Type R
-Mustang RTR

I'd be pretty tempted to keep one of those.

Does any of that actually work or is it just bs? When's the last time you heard of someone winning the million bucks on the McD's monopoly thing? Or any of these contest things for that matter? I would assume it would be big news. But here we are, never hearing about the winners!

I won the xB (RIP) in a radio station contest. Toyota Mid Atlantic asked what dealership I wanted to pick up the vehicle at, I then received a certificate, they communicated to the dealership GM and sales manager and I went in and ordered the car (of course I didn't want anything spec wise that they'd have in stock) and there was a collection of port installed options to go on as I had $5k in "scion bucks" to spend on accessories. I'm the guy who was said that they never actually released a limited slip for the xb/xa. 

Taxation was a pain. Both CBS radio and the local station filed 1090-misc forms. That took about 6 years to gets straightened out with the feds and state, each...

If I were to do it all over again and the price vehicle weren't to have all the utility of an xB, i'd likely take a strong look at the local dealerships used car lots before deciding upon which dealership I wanted to pick up the vehicle from and I'd negotiate with Toyota Mid-Atlantic and the dealer who had something that caught my eye on their lot, the used thing already in inventory versus the thing that was 12 weeks away and had a limited supply at the time that they couldn't keep in stock. The xB served me well until it's demise, I do miss it enough that only an Element will serve as a suitable replacement (i don't trust transit connects enough mechanically, and all of the blind spots). 

A rich old dude I worked with in the 90's told me he won an Amphicar back in the day.  Then he was all; eh, I sold it.   

Vajingo said:

nderwater said:

Prize cars on Omaze right now include...

-Restomod Bronco
-Overland conversion Sprinter
-Challenger Demon
-911 Turbo S
-Civic Type R
-Mustang RTR

I'd be pretty tempted to keep one of those.

Does any of that actually work or is it just bs? When's the last time you heard of someone winning the million bucks on the McD's monopoly thing? Or any of these contest things for that matter? I would assume it would be big news. But here we are, never hearing about the winners!

See my post above yours and Captdownshift's below yours.  I've also won trips to Australia, Jamaica, Space Camp & Disney, a monster TV, guitar, tires, and a bunch of other less significant stuff. 

Many years ago there was an article  in Car & Driver (IIRC), it might have been another magazine about a young man who won a Ferrari and how it wasn't a good thing for him.  Seems taxes were his biggest problem among many others.  

In reply to iceracer :

Did you win a new car?

In reply to M2Pilot :

Took me a while and I went on so many tangents/saw so many people that dont post anymore ... but found it!

Land Rover thread!

My Mom won a car on a TV game show when I was 2. Fiat 128. 
 

She also won a piano, which she sold to pay the taxes on the car.

So, the first thing she did was pay the taxes.  The first thing I did was different...

She was running her Saturday morning errands with me. Grocery store first, then dry cleaning, etc.  After the groceries, she locked me in the car to run in and get her dry cleaning. She was only gonna be a few minutes.  This was 1963- there were no baby seats or seat belts. 
 

When  she came out, there was a small crowd gathered around the car with apparent distress. She freaked out- figured something had happened to me. 
 

All grocery stores pack their bags the same way... the last thing put in the bag is the eggs. Well, 2 year old me had discovered the eggs, and had also discovered how much fun it was to throw them at the INSIDE of the windshield. My mother had been careful to lock me in the car, so no Good Samaritan could stop me from my shenanigans. I was just enjoying the attention as I threw eggs at the windshield..  
 

In case you are wondering, it's not possible to prevent eggs from dripping down into the defroster once they've been thrown at the windshield. 
 

First thing my Mom did was pay her taxes. First thing I did was insure her new car would always smell like rotten eggs whenever the defroster was turned on, for as long as she owned the car. 10 years. 

In reply to M2Pilot :

You have won multiple cars?  Damn.

In reply to SVreX (Forum Supporter) :

Had to be a different Fiat.

128s were not being made in the early 60s. Maybe a 600?

Slippery (Forum Supporter) said:

In reply to SVreX (Forum Supporter) :

Had to be a different Fiat.

128s were not being made in the early 60s. Maybe a 600?

Crap. You're right. 
 

It wasn't a Fiat. It was a Renault. 
 

But they were real eggs! Haha!!

SVreX (Forum Supporter) said:

Slippery (Forum Supporter) said:

In reply to SVreX (Forum Supporter) :

Had to be a different Fiat.

128s were not being made in the early 60s. Maybe a 600?

Crap. You're right. 
 

It wasn't a Fiat. It was a Renault. 
 

But they were real eggs! Haha!!

I was secretly hoping it was a 128 but you were a teenager and not 2. 

In reply to Slippery (Forum Supporter) :

My first car was a 128. I mixed them up. 

SVreX (Forum Supporter) said:

Slippery (Forum Supporter) said:

In reply to SVreX (Forum Supporter) :

Had to be a different Fiat.

128s were not being made in the early 60s. Maybe a 600?

Crap. You're right. 
 

It wasn't a Fiat. It was a Renault. 
 

But they were real eggs! Haha!!

Was it a Dauphine?  That was my first car, worst car I've ever owned.  Had it been free, it might've been the 2nd worst.

In reply to M2Pilot :

Do you want to play the lottery with me? 

Win a sporty car? Take it to the Challenge. Tom said its legal.

One of my favorite techs at the dealership I worked at's wife was a stay-at-home mom.  She treated radio, TV, grocery store, etc. contests like a job.  I believe she was a super couponer too, but that's another story.  The tech's wife was part of a tight-knit group who knew of every possible game/promo/prize any of them might be eligible for, and worked every game they could to their mutual advantage.  There were usually stipulations that if you won, you couldn't win again for so many months/years, so they worked to help whoever was eligible win.

The tech's wife won all kinds of stuff, I don't think they ever paid for a vacation, they won all kinds of trips/cruises, a real nice camper, ATVs, etc.

A funny kind of "small world," coincidence, one of my fellow service writers was a local radio DJ for a long time before working at the dealership, and knew the tech's wife from all the radio promo competitions, she'd participate in, ya know, "be caller number 12 to win so-and-so."  As such, my ex-DJ coworker really didn't like the tech's wife, or the tech very much, in his mind they were cheats and ruining the promos for "regular" folks.

More on topic, I recall the tech bitching about the taxes they owed on all the prize his wife had won every year, and the ex-DJ always laughing about the tech's bitching.

Y'all mentioning the McDonald's Monopoly game, it 100% was a scam for years, involved an ex-cop in charge of security, some mafia, and some Mormons.  I think the article I read about this was on the Daily Beast some years ago, but it's behind a paywall now.  It seems that HBO has a documentary about the scandal coming out next month though.  I thought it was a pretty intriguing story.

https://www.vulture.com/2020/02/mcdonalds-monopoly-game-fraud-true-story.html

McMillions, the documentary has been out for about a year.  Some pretty wild stuff in it.  The initial FBI agent is particularly entertaining.

It brings up the interesting issue of: if you have access to a lot of illegally won prizes, how do you take advantage of that without making it clear you are winning all of them.