Oprah TRIES to be nice but the IRS SUCKS!

Oprah car winners hit with hefty tax

Like any prize, the value is counted as income; winners must pay up to $7,000 or forfeit the car.
September 22, 2004: 7:05 PM EDT



NEW YORK (CNN/Money) - Leave it to Uncle Sam to spoil the party.


When Oprah Winfrey gave away 276 cars last week to the audience of her show, images of people laughing, jumping, crying -- some hysterically -- filled the airwaves and the give-away became stuff of legend. Late night talk show hosts and newspaper columnists are still talking about it.

But now some of those eager prize-winners have a choice: Fork over $7,000 or give up the car.

According to a spokeswomen for Harpo Productions Inc., Oprah's company, the recipients must pay a tax on the winnings, just like any prize.

For a brand new Pontiac G-Six, the model given away on the show, the sticker price is $28,500. The $28,500 would need to be claimed as income so, depending on the individuals tax bracket, the tax could be as high as $7,000. And that was after Pontiac agreed to pay most of the local charges, including state sales tax and licensing fees.

The Harpo Spokeswomen said winners had three choices. They could keep the car and pay the tax, sell the car and pay the tax with the profits or forfeit the car.

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Posted by kptoys

Oprah car winners hit with hefty tax

Like any prize, the value is counted as income; winners must pay up to $7,000 or forfeit the car.
September 22, 2004: 7:05 PM EDT



NEW YORK (CNN/Money) - Leave it to Uncle Sam to spoil the party.


When Oprah Winfrey gave away 276 cars last week to the audience of her show, images of people laughing, jumping, crying -- some hysterically -- filled the airwaves and the give-away became stuff of legend. Late night talk show hosts and newspaper columnists are still talking about it.

But now some of those eager prize-winners have a choice: Fork over $7,000 or give up the car.

According to a spokeswomen for Harpo Productions Inc., Oprah's company, the recipients must pay a tax on the winnings, just like any prize.

For a brand new Pontiac G-Six, the model given away on the show, the sticker price is $28,500. The $28,500 would need to be claimed as income so, depending on the individuals tax bracket, the tax could be as high as $7,000. And that was after Pontiac agreed to pay most of the local charges, including state sales tax and licensing fees.

The Harpo Spokeswomen said winners had three choices. They could keep the car and pay the tax, sell the car and pay the tax with the profits or forfeit the car.

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does this surprise you? there's a tax on everything

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Posted by jenny2penny

I figured that,,that goes for any show you'd win something from....

Orprah maybe should have paid 1/2 of taxes


I'd pay the $7,000K for a new car.....

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The company did pay for either a city tax or some other tax, it is a shame, maybe they will work something out.

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Posted by kptoys

Yeah but didnt the people who got the new cars have an issue with not being able to afford one? Werent they driving 20-30 year old clunkers with MILLIONS of miles on them? How can they afford $7k? Plus taxes and penalties if they set up a payment plan?

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I agree, I say that went so far why not just pay the additional tax? Itis not like they can't afford it!

It's not a cut and dry $7000...it will be considered Income...which with the right write offs could be brought down considerably....the winners that can't afford it should just sell the car, save the taxable amount and spend the rest on another car probably used.

Hey, free is free...you can't condemn Oprah for that. It's the EXACT same as winning a car on Price is Right or any other game show. OR like winnning the lottery.

Oprah should pay the tax if she's going to give cars away. Otherwise it's not really a gift.

I mean these people were picked because of their need for a car. If they had $7000 they could buy a used car (not a great one but would get them around).

I'm so disappointed in her now.

If Oprah gives them the $$ for the taxes, then that $$ would be considered a gift as well right? then that $$ would be taxable too??

She still did a great thing.

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Posted by Maribelle7777



I'm so disappointed in her now.

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You can't be serious?

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Posted by StepherG

If Oprah gives them the $$ for the taxes, then that $$ would be considered a gift as well right? then that $$ would be taxable too??

She still did a great thing.

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I suppose, but if they could afford $7000 in the first place, they wouldn't need Oprah.

I guess it was a nice gesture & great for her ratings, but really, did it do them any good?

If she paid the tax (I think) she could probably write it off on her taxes next year.


ETA: it is not the same thing as if you were to get $$, like when you hit Lotto or win a radio contest or something, then they just take the 36% or whatever it is from the winnings...what are they going to do. ..take 36% of a car????

Its a neverending cycle. If Oprah gives them $7000 to pay for the taxes... there are taxes on that as well. If she agrees to pay for those taxes on the taxes... then there are taxes on the taxes on the taxes. Where does it end?

These people should be plenty happy they got a FREE car. If they can't afford the lousy $7000 for the taxes on the brand new car... then simply sell the car and pocket the FREE $20k (or whatever is left in the deal).

Sounds like a great deal to me and IMO Oprah was VERY generous.

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Posted by DjPiLL

Its a neverending cycle. If Oprah gives them $7000 to pay for the taxes... there are taxes on that as well. If she agrees to pay for those taxes on the taxes... then there are taxes on the taxes on the taxes. Where does it end?

These people should be plenty happy they got a FREE car. If they can't afford the lousy $7000 for the taxes on the brand new car... then simply sell the car and pocket the FREE $20k (or whatever is left in the deal).

Sounds like a great deal to me and IMO Oprah was VERY generous.

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AGreed!

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Posted by DjPiLL

Its a neverending cycle. If Oprah gives them $7000 to pay for the taxes... there are taxes on that as well. If she agrees to pay for those taxes on the taxes... then there are taxes on the taxes on the taxes. Where does it end?

These people should be plenty happy they got a FREE car. If they can't afford the lousy $7000 for the taxes on the brand new car... then simply sell the car and pocket the FREE $20k (or whatever is left in the deal).

Sounds like a great deal to me and IMO Oprah was VERY generous.

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yep thats what I would do sell the car and get one I wanted, personally I dont want a pontiac

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Posted by DjPiLL

These people should be plenty happy they got a FREE car. If they can't afford the lousy $7000 for the taxes on the brand new car... then simply sell the car and pocket the FREE $20k (or whatever is left in the deal).

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But it's not a free car, that's what I am trying to say. even if they did turn around & sell it. If it were $28,000, they owe $7000 already, making at $21,000, then they get taxed AGAIN when they sell it for making a fiscal gain on the sale.

I understand that they are still ahead, but it just seems too complex for its own good. Oprah is in a position to give the FULL gift, especially considering her ratings for that show were extremely high. She definately made money off the deal, and I know that is her purpose as a businesswoman, but she could have done it all they way.

ETA: it is not the same thing as if you were to get $$, like when you hit Lotto or win a radio contest or something, then they just take the 36% or whatever it is from the winnings...what are they going to do. ..take 36% of a car????

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Yes, they are trying to take 36% of the car...it's called the $7000 in tax money.

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Posted by StepherG




ETA: it is not the same thing as if you were to get $$, like when you hit Lotto or win a radio contest or something, then they just take the 36% or whatever it is from the winnings...what are they going to do. ..take 36% of a car????

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Yes, they are trying to take 36% of the car...it's called the $7000 in tax money.

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Yeah, but where do they get it from when these people cannot pay for it.