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.
Donna
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For some of these people they may be in lower tax brackets so it's less than the $7,000.
Also if they can't afford to pay the tax then sell the car and buy a cheaper one that they can afford - they can still get brand new cars for under $20,000.
I disagree that Oprah should have to pay the taxes.
DjPiLL
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She did give a FULL GIFT! Is any of this $7000 going back to her? NOPE.
Don't blame Oprah. Blame the government for sticking their hand out on this one.
And you think its too complex? Do you honestly think if you were one of those people.... you would say 'Oh... thanks but no thanks. I don't want the car because this deal is far too complex for me to have to deal with.'
If I was one of those people... I would take the car from Oprah's studio to my nearest car dealership... turn the title over to them... and have them buy the car and handle all the tax paperwork. Piece of cake... and perhaps the easiest way for me to make 15k.
HearzBellz
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Whether she personally should have paid the taxes or not, you cannot argue that her production company and the network made at least that much money from that one show. It just seems a bit unfair, and not entirely altruistic. JMHO
DjPiLL
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Posted by HearzBellz
Yeah, but where do they get it from when these people cannot pay for it.
Drive the car to your nearest dealer. Have them buy the car and have them pay the taxes on it. You net the difference. They do this all the time when they buy back cars that have existing loans on them.
Piece of cake to make easy money.
DjPiLL
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It totally baffles me how some people on here can actually make Oprah out to be the 'bad guy' on this one. ROFL!
HearzBellz
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Posted by DjPiLL
She did give a FULL GIFT! Is any of this $7000 going back to her? NOPE.
Yes, it is going back to her...via her higher ratings, meaning higher cost of advertising on her show, meaning higher paychecks from the network.
I am not implying that it is *hard* to buy & sell a car...I have done it at least 15 times in my life, but once those cars are driven off the lot (or more specifically *delivered*), they lose value, and a big chunk of it. Turning around to the nearest dealership & trying to get ay value over even the invoice price would be difficult, never mind the sticker price.
DjPiLL
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Posted by HearzBellz
I am not implying that it is *hard* to buy & sell a car...I have done it at least 15 times in my life, but once those cars are driven off the lot (or more specifically *delivered*), they lose value, and a big chunk of it. Turning around to the nearest dealership & trying to get ay value over even the invoice price would be difficult, never mind the sticker price.
Ever hear of the phrase... 'Never look a gift horse in the mouth' ?
And I think the ratings thing is 'overrated'. So big deal she gave people free cars. Good for her. Am I going to start watching her show now because of this? LOL NOPE.
HearzBellz
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Posted by DjPiLL
It totally baffles me how some people on here can actually make Oprah out to be the 'bad guy' on this one. ROFL!
I am not saying she is a bad PERSON, all I am saying is that she will make this money back from the raised viewership during sweeps, which guess what, determines the advertising rates that the network will charge to show a commercial during her show for the next SEASON. Simple concept. And YES, I think the IRS SUCKS. I think it suck that lower bracket citizens pay a higher rate of taxes than the richest 2%...I think it sucks that a prize for a deserving and needy person has a caviat.
HearzBellz
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Posted by DjPiLL
Posted by HearzBellz
I am not implying that it is *hard* to buy & sell a car...I have done it at least 15 times in my life, but once those cars are driven off the lot (or more specifically *delivered*), they lose value, and a big chunk of it. Turning around to the nearest dealership & trying to get ay value over even the invoice price would be difficult, never mind the sticker price.
Ever hear of the phrase... 'Never look a gift horse in the mouth' ?
And I think the ratings thing is 'overrated'. So big deal she gave people free cars. Good for her. Am I going to start watching her show now because of this? LOL NOPE.
Of course I have heard that phrase...please.
What I am saying is that the cars were not free.
It doesn't matter that you watched it or not. What matters is that the numbers submitted by Nielsen for that show during sweeps indicate that she can now charge more to advertisers. It is the way it workls whether we like it or not. (and just for the record, I do not like it, I think it is a horrible and inaccurate system).
StepherG
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Posted by HearzBellz
What I am saying is that the cars were not free.
Nothing you win or are giving publicly is EVER free!!
HearzBellz
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Posted by StepherG
Posted by HearzBellz
What I am saying is that the cars were not free.
Nothing you win or are giving publicly is EVER free!!
I know.... Geez, I didn't really mean to make this a whole huge debate.
I think these are great ideas that Oprah has to help people, and when she does them to one or 2 people a show, you never hear about it n the papers & such, but I guess when it was for a larger number of people, it made headline news more than once.
Maribelle7777
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Posted by DjPiLL
Posted by Maribelle7777
I'm so disappointed in her now.
You can't be serious?
Why of COURSE I wasn't serious! OMG! I was KIDDING!!!! I'm such a funny gal can't you tell????????
LuvMyMichael
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Oh my Goodness...what the hell?
DjPiLL
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Posted by Maribelle7777
Why of COURSE I wasn't serious! OMG! I was KIDDING!!!! I'm such a funny gal can't you tell????????
LOL thank god. I was really starting to wonder for a sec.
MCDO15
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still worth it for up to $7000... even if you took out a small loan for it.. you are getting a brand new 'hot' car!!
the network and pontiac got huge( i mean HUGE) ratings because of this...i would think somthing would get worked out.
HearzBellz
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Posted by MCDO15
the network and pontiac got huge( i mean HUGE) ratings because of this...i would think somthing would get worked out.
