“… in this world, nothing is certain except death and taxes.“This quote, attributed toBenjamin Franklinin 1789 (but written decades earlier byChristopher Bullockin his playThe Cobbler of Preston), rings just as true now as it did then, even for game shows. Maybe not the “death” part — even ata whopping 2,000 pounds,ThePrice is Right’s Big Wheel hasn’t killed anyone — but surely not the “taxes” part either. After all, what kind of monster would rain on someone’s big Showcase win? The I.R.S., that’s who. After the last Plinko chip has been dropped, after the Showcase is won, and the cameras turn off,the taxman cometh.
‘The Price Is Right’s Taxing Rules, Explained
So, let’s say you walk away from a successful stint onThe Price Is Rightwith a Ford Mustang, a washer/dryer set, a Caribbean cruise vacation, and a cool $5,000 cash. You might understand taxes being paid on the $5,000, as crappy as it would be, but how can a Caribbean cruise be taxed? A non-cash prize is considered to be income at the reported value. In other words,your non-cash prize is treated as a cash prize. So, not only are you claiming the $5,000 as income, but the $40,000 car, the $2,500 washer/dryer combo, and say another $2,500 for the cruise. You are now reporting $50,000 in income, and paying the appropriate taxes at the state and federal levels. That’s the state you won the prize in, by the way, so in the case ofThe Price Is Right, that’s California. Those taxes are thenclaimed as a creditin the contestant’s home state. But here’s the catch: Even if your home state has a lower tax rate (which, compared to California’s,is 49 states),you don’t get back the difference.
‘The Price Is Right’s 84-Year-Old Margaret Shocks Drew Carey With Unbelievable Hole-in-One Win
She “putt” Drew Carey in his place.
Now here’s where you really get screwed over. The government may see your non-cash prizes as income, butThe Price Is Rightdoes not. With few exceptions, if you win a non-cash prize, you take the non-cash prize — there is no option to accept the cash equivalent. Follow the logic: Your cash prize is cash. Your non-cash prize is also cash, but only to the taxman. So your non-cash prize, which technically is a cash prize,can’t be exchanged for a cash prize. That would be the item’s full retail value, by the way, not what you might pay at Crazy Freddy’s Car Emporium. Win a really big prize, likeMichael Stouberdid in 2019, and you might even be knocked into a higher tax bracket, meaning you’re paying even more for the prizes you won.
‘The Price Is Right’ Prize Winners Share Their Tax Horror Stories
The Price Is Right, to their credit, sends a letter to every winner —the “tax letter” as it’s known in-house— whichtotals up the taxes that must be paid on the prizes before the winner takes ownership. The letter doesn’t make it any less shocking to the prize winner, however.ABC Newscites an example of aPrice Is Rightwinner who won a new truck, a washer and dryer, an Apple computer, a poker table, and a trip to Washington, D.C., which all totaled an impressive $57,000 haul. According to the winner, he was on the hook for around $17,000 or $20,000 in taxes.
That’s peanuts compared to what Tacoma, Washington schoolteacherSheree Heilwas expected to shell out in taxes for her 2013 prize. Heil wonthe most expensive prizein the show’s history: a $157,300 Audi R8 Spyder. The California state taxes alone were $12,000. Estimates for the Washington taxes came in at $14,915. The federal taxes, meanwhile, totaled $34,453. Altogether,taxes came in just shy of $61,400, approximately 39% of the value of the sports car.
The prize winner cited byABC Newsclaims that some winners decline the prizes outright, unwilling, or perhaps even unable, to pay the taxes in order to bring their prizes home. He does add another reason, however, why some winners decline their prize, saying, “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.”
The Price is Right
