The Price (Plus Tax) Is Right

Contestants on The Price Is Right may win big but mayalso be unprepared for the hefty taxes owed before receiving their prizes.  Winners must pay California’s state incometax up front as well as federal income taxes. If the prize is large enough, it could even bump you into a higherfederal tax bracket.

According to AndreaSchwartz, who won a Mazda 2 compact car, she had to pay $2,500 in taxes beforeshe could claim the car or end up forfeiting the prize.  Another contestant explains that once you geta call from the car dealership during the 90-day window, you only have 10 daysto arrange the paperwork, pay the taxes, and go pick up your new car whereverthe dealership may be. 

Schwartz also won a pooltable and shuffle board table, which she had to pay money to store and ship toanother location due to the small size of her apartment.  She had to sell the prizes because the showdoes not allow you to take the cash value of any prizes.  That includes extravagant vacations, whichcontestants must also pay sales and income taxes on or forfeit.

See SarahB. Weir, The Price Is Right . . . and theTaxes Are High, Yahoo! Shine, Aug. 19, 2013.

Special thanks to David S. Luber (FloridaProbate Attorney) for bringing this article to my attention.