Similar to lottery
winnings, winning a prize subjects the recipient to income tax. Section 74 of the tax code states that prizes
and awards are included in gross income unless these items qualify as excluded
as noted in this section or are considered scholarships and fellowship grants
under Section 117. Gregory R. Hampton,
who recently won 100 years of season tickets for his beloved New York Giants as
part of the NFL’s Tickets for 100 years contest, is therefore responsible for
the taxes on his winnings. Luckily for
Mr. Hampton, the NFL announced that they will be paying the estimated taxes on
the winnings.
Upon winning any
sort of gambling, raffle, lottery or other similar prize, one must report the
full amount of the winnings for the year on their form 1040. One may itemize deductions on Form 1040 to
take advantage of any gambling losses but may not net their winnings and
losses. Interested in learning more?
Contact the experienced attorneys of Morris Law Group.
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