Submitted By: Tina
Answered: July 8, 2016 9:25 am

I won a new car. Do I have to pay taxes on it?

Yes. The big question is how much income do you have to report? Likely you’ll receive Form 1099-MISC or other information return listing the value of the car that the IRS wants you to report as income. However, one Tax Court case allowed the winner to report only the amount that could be realized on an immediate resale of the car. Consult your own tax professional for advice on how to report your prize.

Tags: Prizes
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Tax Glossary

Investment in the contract

The total cost investment in an annuity. When annuity payments are made, the portion allocable to the cost investment is tax free.

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