Sunday, June 24, 2012

William Jacobson (Cornell) blogs the tax consequences of the Obama campaign's Dinner With Barack fundraising raffle. Three winners and their guests will receive:

Roundtrip airfare (valued at $1,200)

One night in a hotel ($200)

Dinner with President Obama ($200)

The rules state that "all federal, state and local taxes associated with the receipt or use of any prize are the sole responsibility of the winner." The $1,600 is includible in each winner's income under § 74 -- at the 35% rate, that results in $560 of federal income tax. (Hat Tip: Greg McNeal.)

https://taxprof.typepad.com/taxprof_blog/2012/06/dinner-with-.html