Regarding the LA championship ring that Artest is donating - this is considered a gift and since the value is over $10,000 this means it has to be reported as income and is therefore taxed at something like 20% of its value - correct? So if true, and I believe it is true, then if the ring's value is let us assume $100,000 or maybe more - this means the unluckey winner has to come up with over $10,000 to pay the FIT. can anyone confirmn this and does anyone know if LA or Artest is covering the tax cost???
The tax will in fact be offset, it's stated on the website that's selling the tickets and they give the actual dollar amount. It's 13+ Gs.
I'm not sure who you're asking about in particular but the donation is being made to an NPO. As such, i don't expect an FIT to be applied to any of the 2 parties you mentioned as they should be exempt along with the charitable organization. The winner of the raffle, on the other hand, is subject to taxes but will be offset by the cash prizes to mitigate the full liability. It effectively makes the the ring the price of the raffle ticket/s that the individual purchases. If you want more nitty gritty explanation, i would think that the LAL organization will "donate" the money to the winner for promotion purposes so effectively making them the "tax payer".
something like this there was a raffle for 2 courtside seats to the celtics/heat opener this year and one of the grand prizes besides the 2 tickets and autographed celtics jerseys was a cash prize to offset the taxable value of the other prizes but the cash prize was sent to the IRS in your name for that reason so the winner actually doesnt see any of the money (in case he/she wants to use it for something else) and wont have to pay anything out of their own pocket as well
Uhh. I'll take a car if all I have to pay is the tax on it. You wouldn't? On the same token, I'll take Ron Artest's ring if all I have to pay is taxes. I could then Ebay it and make a gigantic profit to pay those taxes with.
