News

If U win a car from lottery, then sell the car...

Discussion in 'Ferrari Discussion (not model specific)' started by Ron328, Sep 20, 2005.

  1. Ron328

    Ron328 F1 Rookie
    Silver Subscribed

    Mar 10, 2003
    2,577
    Willamette Valley, Oregon
    Full Name:
    Ron
    do you owe uncle sam any taxes? Just curious.

    Ron
     
  2. To remove this ad click here.

  3. matteo

    matteo F1 World Champ

    Aug 1, 2002
    13,748
    On a plane somewhere
    Full Name:
    Heir Butt
    You have to pay taxes on the car you win...not on the sale
     
  4. Ron328

    Ron328 F1 Rookie
    Silver Subscribed

    Mar 10, 2003
    2,577
    Willamette Valley, Oregon
    Full Name:
    Ron
    Oregon doesn't have a sales tax. Will the amount of tax be based on the car's MSRP? Thanks.
     
  5. matteo

    matteo F1 World Champ

    Aug 1, 2002
    13,748
    On a plane somewhere
    Full Name:
    Heir Butt
    yes, MSRP. The Fed's will consider it income for the year
     
  6. darth550

    darth550 Five Time F1 World Champ
    Lifetime Rossa

    Jul 14, 2003
    58,839
    In front of you
    Full Name:
    BCHC
    Unless you sell it in Santa Clarita. The hall of records blew away in the last big windstorm.
     
  7. To remove this ad click here.

  8. cshargh

    cshargh Karting

    Apr 18, 2005
    233
    Redondo Beach, CA
    Full Name:
    Cyrus
    Unless you sell it for over MSRP (The amount you originally were taxed on), in which case you have to pay taxes on the gain.
     
  9. Ron328

    Ron328 F1 Rookie
    Silver Subscribed

    Mar 10, 2003
    2,577
    Willamette Valley, Oregon
    Full Name:
    Ron
    Thank you all!
     
  10. JaguarXJ6

    JaguarXJ6 F1 Veteran

    Feb 12, 2003
    5,440
    Black Hawk, CO
    Full Name:
    Sunny
    Good call.. getting rid of the 328.

    kidding :p
     
  11. Dino Martini

    Dino Martini F1 Rookie

    Dec 21, 2004
    4,619
    Calgary Alberta
    Full Name:
    Martin
    yea, theres this lottery here in Calgary for cancer research and stuff. Three of the prizes are as follows:

    A brand new Ferrari F430 coupe, Aston Martin DB9 coupe plus 50k cash, a Maserati Spyder plus 70k cash. ooo
     
  12. To remove this ad click here.

  13. bretm

    bretm F1 Rookie

    Feb 1, 2001
    4,577
    Northern NJ
    Full Name:
    Bret
    So you'd sell the Aston Martin and Maserati right? If you're already planning on selling the 430 I'm pretty sure God will prevent you from winning it in the first place.
     
  14. amenasce

    amenasce Two Time F1 World Champ
    Silver Subscribed

    Oct 17, 2001
    29,205
    Full Name:
    Joe Mansion

    Haha :)
     
  15. mfennell70

    mfennell70 Formula Junior

    Nov 3, 2003
    564
    Middletown, NJ
    Why not? Since the sale will be less than the MSRP, haven't you incurred a capital loss of MSRP - sales price?

    Maybe prizes are handled differently to avoid fraud (ie: I "sell it" to you for cheap and give you a taste of my resultant tax savings).
     
  16. jvbjr

    jvbjr Formula Junior
    BANNED

    Aug 19, 2005
    418
    I would say you can take the $11,000 gift deduction(if this is a USA deal), but if the car has a MSRP $100,000, you would owe either gift or income taxes for the remaining $79,000.

    How is this different than winning Lotto?

    If you win $100,000 in Lotto, you have to pay income taxes on it. Just because the payment came in the form or an automobile does not negate the taxes due.

    I would propose the reason MANY such automobiles get resold immediately is the winner does not have the ability to pay the income tax. When you win $100,000 in Lotto they take the taxes FIRST, and send you a check for the remaining $50,000. You never see the other $50,000, even though the taxes may not be due for 9 months.

    Winning the car gives you 100% of the asset, but you know come April 15th you'll owe $40,000 in taxes. So you sell the $100,000 MRSP car for $80,000, show a $20,000 capital loss on that transaction, so you then owe taxes only on $80,000, so more like $30,000 due and you net $50,000 in the end.
     
  17. Pranucci

    Pranucci Formula Junior
    Silver Subscribed

    Mar 17, 2005
    585
    Carpinteria, CA
    I don't think that you get to claim a capital loss on the sale.If it was a depreciated asset that you sold for less than the book value then yes. It's a car, not an income producing asset. I don't believe there is a gift deduction. That is a deduction from the non taxed part of your estate when you die. If the IRS agent looking at it knows cars, he/she'd know that the Aston and the Ferrari are both selling for more than MSRP and that would be the taxable income to you.
     
  18. Choptop

    Choptop F1 Rookie

    Aug 15, 2004
    4,455
    Carmichael, CA
    Full Name:
    Alan Galbraith

    where can I buy tickets?
     
  19. goldyF355

    goldyF355 Formula 3

    May 30, 2004
    1,408
    Toronto
    Full Name:
    Steve G.
    Lottery wins in Canada are tax free, .....sadly, this is the ONLY advantage we have tax-wise over the Americans....
     
  20. henryr

    henryr F1 World Champ
    Silver Subscribed

    Nov 10, 2003
    18,223
    Atlanta
    Full Name:
    Juan Sánchez Villa-L
    ??????

    you are going to receive a 1099 from the charity for the msrp or an appraised amount whichever is more applicable to the item won. uncloe sam will expect his cut. what you do with the car does not matter.
     
  21. Dino Martini

    Dino Martini F1 Rookie

    Dec 21, 2004
    4,619
    Calgary Alberta
    Full Name:
    Martin

    well, I sort of got the prizes mixed up. Its like this

    Grand Prize - One Million Dollars

    First Prize - Ferrari F430 + 50k cash

    Second Prize - Aston Martin DB9

    Early Bird Prize - Maserati Spider + 70k cash


    not sure if out of canadians can buy tickets, but you can try

    http://www.cashandcarslottery.ca/index.html
     
  22. M512

    M512 Formula Junior

    Sep 5, 2005
    580
    Earth
    Full Name:
    M512
    "limited to residents of the Alberta Province" Oh well, it was a good thought. Thanks Martin!
     

Share This Page