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Old 04-26-2013, 08:27 AM   #1
BradJW
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Price is Right - OAD 4/25/2013

Anyone watch it yesterday?
Apparently, they tried to give away a $285,716 Ferrari!

http://autos.yahoo.com/blogs/motoram...181441219.html
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Old 04-26-2013, 08:30 AM   #2
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And apparently today, they're playing Plinko for for $500K
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Old 04-26-2013, 04:32 PM   #3
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I would've gotten the first number right if it ever came up. Beyond that, who knows.

Jalopnik has the video: http://jalopnik.com/watch-this-woman...pric-481329347
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Old 04-27-2013, 02:36 PM   #4
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Anyone watch it yesterday?
Apparently, they tried to give away a $285,716 Ferrari!

http://autos.yahoo.com/blogs/motoram...181441219.html
This was "Price is Right Big Money Week" - each day, there would be a game played for at least $100,000:
Monday - Punch-A-Bunch for $250,000
Tuesday - Grand Game for $100,000
Wednesday - Pay the Rent (unchanged, as it's normally for $100,000 anyway)
Thursday - 3 Strikes for a $280,000 Ferrari
Friday - Plinko for $500,000

A couple of trivia notes:

Before this week, the only prize worth more than $100,000 ever offered on the daytime version of the show was a Tesla car on an Earth Day episode (I think it was 2011 - instead of Golden Road, it was called Green Road that day).

There's a reason 3 Strikes is played for expensive cars; using the "3 strikes in the bag" rule (as opposed to the "1 strike in the bag, which goes back in when it is pulled out" rule they had for Bob Barker's last few years on the show), with a 6-digit car, your chance of winning if you were told the price of the car in advance would still only be 1/3.
(If you know the price, then any chip that is pulled would be removed, so it is a matter of getting the 6 digits before the 3 strikes; this is the same as pulling out all of the chips and winning if the last chip was a strike (since the numbers came out first) or losing if the last chip was a number (since the strikes came out first), and since each chip has an equal chance of being last, the chance of winning is 3 (strikes) out of 9 (chips).)
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Old 04-27-2013, 04:33 PM   #5
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I saw the day when the girl one 100k in one game and won like 122k overall. At least the last ten minutes of it.
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Old 04-27-2013, 05:07 PM   #6
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If you win the Ferrari do they give you the money to pay the $75,000 of federal income taxes on it (plus whatever state taxes are)?
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Old 04-27-2013, 05:26 PM   #7
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If you win the Ferrari do they give you the money to pay the $75,000 of federal income taxes on it (plus whatever state taxes are)?
Nope.
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Old 04-27-2013, 08:28 PM   #8
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If you win the Ferrari do they give you the money to pay the $75,000 of federal income taxes on it (plus whatever state taxes are)?
Nope.
Not only that, but there's a reason they like to give away a lot of trips at once (for example, frequently you will see a showcase that consists only of three trips); there's little chance that the winner will take them all, considering:
(a) Any trip they do take, they have to pay tax on the listed amount (airfare and hotel);
(b) There is a time limit - usually, a year - in which the trip can be taken (this is especially troublesome as far as the winner is concerned with cruises, since there are very few sailing dates in the allowable period);
(c) You can't sell the trip to anybody else - in fact, I'm not sure you can even give it away (e.g. to your parents as an anniversary gift); there might be a rule that says the winner has to be one of the persons on the trip.

Note that the winner does have the option to decline any prize, but they don't get anything in exchange for it. (Also, if you win a car, or any other "physical prize" for that matter, you can sell it to anybody you want.)
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Old 04-29-2013, 09:53 PM   #9
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Note that the winner does have the option to decline any prize, but they don't get anything in exchange for it. (Also, if you win a car, or any other "physical prize" for that matter, you can sell it to anybody you want.)
Interesting, I definitely remember other things (I *thought* game shows, but maybe just contests) talking about "or cash value" in exchange for a prize.
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Old 04-30-2013, 01:52 PM   #10
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Interesting article from ABC News:

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Oh, happy day! You’re a contestant on a popular game show – “The Price Is Right,” let’s say. You spin the wheel, you make the winning bid, and suddenly – ka-ching! – you’ve won the Lexus or the dishwasher or the lifetime supply of nail clippers. Pretty swell, right?

From a tax standpoint, maybe not.

Consumerist.com gives the example of a “Price is Right” winner (name withheld) whose haul included a new truck, a washer and dryer, an Apple computer, a poker table and a trip to Washington, D.C.

On the social news site, Reddit, the man fielded questions from people wanting to know if there was any downside to winning.

There sure was: “I won $57,000-worth of items. I had to pay around $17,000 or $20,000 in taxes.”

Some winners, he said, decline to take their prizes because they don’t want to pay the taxes.

If winners had the option of taking cash, rather than the fridge or car, it would simplify paying Uncle Sam. But that’s possible only under certain circumstances, the “Price Is Right” winner said.

“We won an Apple computer, and Apple doesn’t ship their items, so we got the money,” he said.

He used the cash to pay taxes on his other items.

Melissa Labant of the American Institute of Certified Public Accounts told SmartMoney that winners have to pay state and federal taxes on their prizes, just as they would on any other income.

They file a return in the state in which they won – meaning, she says, usually New York or California. Then, they claim those taxes as a credit in their home state.

But there’s a catch, she said: If your home state has a lower tax rate, you won’t get back the difference.

Another catch: You’re paying taxes on the item’s full retail value – in the case of a car, say, on the manufacturer’s suggested retail price, rather than on the discounted price a buyer on the open market might pay. Win a really big prize, and the income might be enough to lift you into a higher tax bracket, further increasing the cost of your good fortune.

The “Price is Right” guy cited another reason winners sometimes say, “No thanks.”

“One guy won a $10,000 cash prize and didn’t take it because he didn’t want to pay half to his ex-wife,” he said.

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Old 04-30-2013, 09:34 PM   #11
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Apple doesn't ship their items?!?!?!?! SAY WHAT?
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Old 05-01-2013, 03:17 PM   #12
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Interesting that ABC News had to include that old chestnut about tax brackets: "and the income might be enough to lift you into a higher tax bracket, further increasing the cost of your good fortune." Makes one wonder if the rest of the article makes any sense as well.
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Old 05-01-2013, 04:17 PM   #13
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Interesting that ABC News had to include that old chestnut about tax brackets: "and the income might be enough to lift you into a higher tax bracket, further increasing the cost of your good fortune." Makes one wonder if the rest of the article makes any sense as well.
Right, because your taxes owed retroactively increase when you make $0.01 beyond the highest bracket you were previously in.
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Old 05-01-2013, 04:45 PM   #14
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Interesting that ABC News had to include that old chestnut about tax brackets: "and the income might be enough to lift you into a higher tax bracket, further increasing the cost of your good fortune." Makes one wonder if the rest of the article makes any sense as well.
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Right, because your taxes owed retroactively increase when you make $0.01 beyond the highest bracket you were previously in.
It's not about the retroactivity, but the marginal rates.

But this is the one situation in which putting you in a higher tax bracket could cost you more money - because you're not receiving money, but payment in kind.
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Old 05-02-2013, 11:09 AM   #15
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Sorry TB, but I don't get what you are saying at all. The higher bracket would indeed increase the cost to the recipient over what it would have been if the bracket were lower but that's not what the ABC piece is talking about.
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Old 05-02-2013, 11:41 AM   #16
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But it would cause the rest of your earnings, like your wages, and any additional income to be taxed at a higher rate.
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Old 05-02-2013, 12:54 PM   #17
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But it would cause the rest of your earnings, like your wages, and any additional income to be taxed at a higher rate.
Not true. When you earn additional money that puts you into the next bracket, only that additional money is taxed at the increased rate. Let's say the tax bracket is 25% up to $87,850*, and the next bracket is 28%. You make $50,000 per year, but then you win a prize worth $40,000 so you suddenly have income of $90,000 that year. You're not suddenly paying 28% on all your normal wages and on the $40,000 worth of prizes. You're paying 25% on everything up to $87,850 and you'll only pay the extra 3% on $2,150.

*Yes, I realize there are other brackets below this, but I wanted to keep my example as simple as possible.
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Old 05-02-2013, 01:11 PM   #18
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The crappy part is that the prize would probably cost you less than $40,000 if you bought it on the open market (assuming non-cash) and now on top of paying a higher rate of tax on part of your income, you need to also find the extra $10k in taxes you owe for the inflated value of the prize, but you haven't actually made any extra money (in this scenario).
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Old 05-02-2013, 01:18 PM   #19
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The crappy part is that the prize would probably cost you less than $40,000 if you bought it on the open market (assuming non-cash) and now on top of paying a higher rate of tax on part of your income, you need to also find the extra $10k in taxes you owe for the inflated value of the prize, but you haven't actually made any extra money (in this scenario).
Totally agree. That's why I'd always pass on the Showcase with the trips, because the retail value of them is ridiculously high. A car you can sell for some reasonable percentage of the MSRP in order to pay your taxes. A trip can't be sold so easily (and according to the post above, can't be sold at all in some cases).
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Old 05-02-2013, 02:38 PM   #20
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Sorry TB, but I don't get what you are saying at all. The higher bracket would indeed increase the cost to the recipient over what it would have been if the bracket were lower but that's not what the ABC piece is talking about.
Yes, I know, and I know that the ABC piece is wrong and doesn't understand marginal rates.

I was just saying that if making more money puts you into a higher marginal bracket, then you have the money to pay it off. If winning "stuff" puts you into the higher bracket, then unless you sell the stuff, you're going to have to use your other money to pay the taxes.
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