Have you ever sold an item that you won?

[cata5]

I'm wondering if you win a big prize like a trip but you don't want to go or whatever...can you sell it? Also, what about taxes on your winnings???

I have barely won anything let alone a big item, but have been curious about this.

[Dyllan]

Well, I can't say about trips specifically, but I can talk about big wins.

Federal income taxes are due on the Fair Market Value of whatever you win. If it's cash, that's just how much you won, if it's something else (like a Truck and Motorcycle) the FMV has to be determined somehow. How exactly is a matter for the tax men (for more info on that, look at the tax thread over in Share the Knowledge).

If you sell it for more than the fair market value, you owe taxes on the difference. If you sell it for less, you do not get any savings on your taxes for it.

In Ohio, you also owe sales tax if it is merchandise, though they usually only hold you to this for big wins. If you sell it, the buyer ALSO has to pay sales tax.

If you get a big win, expect to be paying at least 1/3rd of its value in taxes, unless you have some awesome deductions on your income tax (which, fortunantely, I do this year).

-Dyllan


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[teraberry]

I won a $3000 fitness equipment. I sold it for $3000 and we did pay taxes for that $3000 ( but who cares we still made a lot!)

I also won a $5000 trip. We have to pay taxes on that. (but who cares we are going to have a great time!)

The amount you pay depends on your own personal financial status and the state you live in.

I imagine we may end up paying up to $500 for our trip, but we also got a 3 peice luggage set (ARV $750) which we will sell on ebay and that will make up part of it. But for a 5 day trip we get tickets, two nights at an upscale NYC hotel, 2 nights at a rustic bed and breakfast in Conn., tickets to see a taping of Martha Stewart Living (if she is still doing them), rental car, breakfasts and lunches. It is well worth the money we will spend in taxes. Especially since my DH and I really enjoy each other and will surely have a really memorable trip to look back on.


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[cata5]

I can see that it is worth it to you. Sounds like some great prizes! I wonder if there are instances where the person can't pay the taxes or wins something they don't want and can't sell. Just wonderin'.

Did you advertise in the paper or knew someone who wanted the exercise equipment??

[Corganiacs]

unfortunately, i dont always enter for trips cuz i know i wont be able to use them.
i sell coupons i win. i give other stuffs away to people i know.


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[teraberry]

cata5 - I did put an ad in the paper and the response was pretty good, because the exercise equipment was the newest model which wasn't even in stores yet. I think once the ad was in it only took a week or so before we had some one who committed to buying it.

With my trip they made it clear that I would have to pay taxes, and that's just the way it goes. If I couldn't do that I would have to turn down the trip. I remember someone else on DOD turning down a trip they won to Europe just because the taxes would've been too high.

Also, unless the rules state that you can have, for example, a trip OR $5000 (its worth) than they will not give you the cash if you can't make the trip. They really stick to the rules I think.


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[Sandal16]

I recently read in our local paper about the man who won the dream house on HGTV. It sits waterfront on the Chesapeake Bay and came fully furnished. Turns out he would have to pay about $500,000 in taxes next April! He and his wife just sold the house, after never spending any time in it, for $1.3 million! He's going to use that money to build his own dream retirement house in his home state of Texas.

A HGTV spokesperson said that almost all of the winners of those houses end up selling them.

[mormor]

Thanks for all the good info. I have only one small wins (under the $500 mark) and haven't had to pay taxes on anything.

The small wins to come in handy, as ebay is a good way to dump some items that you may not want (for example, I have sold a bicycle, movie posters - people have paid up to $20.00 for them, CD's, video games, etc.)

Otherwise, I have been able to trade with other sweepstakers for something I want.


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