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Noel Santos
Emmanuel A. Santos JD CPA, Incorporated
447 Sutter Street, Suite 714, San Francisco, CA 94108
Phone: 415-362-8921
Fax: 415-362-8924
Cell: 415-412-5839
Email: noel@eas-cpa.com
Website: www.eas-cpa.com
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Question:
I bought a fundraising ticket to support a non-profit and I won the main prize, a new car. Will I be taxed on winning the car?
With no cash to withhold, the winner of a non-cash non-profit raffle must pay the organization 25% of the prize’s fair market value, minus the amount of the wager. However, in some instances, the organization may pay the tax for the winner.
If the value of the car is at least 300 times the value of your wager, you’ll receive a Form W2-G from the non-profit showing the car’s value and the tax withheld. Since the IRS considers this prize to be income, you’ll need to report the vehicle on Form 1040. Keep in mind you may also owe state taxes.
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