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There is no such thing as a free lunch ... or an all-expenses paid trip to Acapulco. That's what "The Price Is Right" contestant Andrea Schwartz found out when she scored $33,000 worth of prizes, including a shiny red Mazda 2 compact car, a pool table, and a shuffle board table, on the popular television game show.

Schwartz told Yahoo! Shine that contestants won't quite know what hit them if they make it on to the show. "It's a whirlwind, they shove you around, and then you are suddenly in the parking lot, saying, 'I just played Plinko.'" You may not be prepared for the hefty taxes you'll owe before picking up your prize, either.

"Yeah, you don't just drive off the back lot with the car like I thought the entire time I was growing up," Schwartz said in a recent interview with the A.V. Club. "After the show, you fill out some paperwork and basically sign your life away. You say that you're going to pay the taxes on it. If you win in California, you have to actually pay the California state income tax ahead of time." Uncle Sam will want his cut as well, and if the prize is big enough, it could even bump you into a higher federal tax bracket, further chipping away at your win.

While it's not news that people pay taxes on winnings, there are a couple of reasons it can be more jarring on The Price Is Right. You aren't guaranteed to be a contestant?you're sitting in the audience one minute, and then the next, you're playing for the showcase. Plus, the show awards trips and products that you may not be interested in. That $5,000 BBQ? You don't need it, and might not pay as much for it on the open market if you did?but you're still on the hook for taxes on the full retail value.

Schwartz's car was shipped from Los Angeles to a dealer near her home in Reno, Nevada. Before she could claim it, she had to pay $2,500 in taxes. Luckily, she had won $1,200 in cash playing the show's Plinko game and also had some money in savings ? but not all contestants have the resources to even collect their winnings. "I think a lot of people don't understand what they're getting themselves into. They're just like, 'Oh my God, I'm going to win a bunch of stuff,' and then they're going to have to forfeit their prizes because they can't afford to pay the taxes on them," she said.

 Another former winner explained on Aurora's Blog that if you win a car, you'll get a call to retrieve it sometime during the 90-day period after your show airs. You only have 10 days to pick it up, and the dealer could be as far as 150 miles from your home address. If you can't arrange the paperwork, tax payment, and pick up within that time, you will forfeit your booty.

 

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As for Schwartz's other prizes, the pool table and shuffle board table were worth an estimated $14,000, but Schwartz sold them for $4,500 on Craigslist because they were too big to fit into her small apartment. "I took a bite on that one," she said. Because the game show will only deliver to the winner's home address, if a prize (say, the ever-popular bedroom set) is too large, the winner will have to pay for shipping to an alternate location. Schwartz was fortunate that the vendor agreed to store the items for the couple of months it took her to unload them.

Wondering why Schwartz and other contestants don't take the cash value instead of the prizes? "There is no cash value option," explained Aurora's Blog. "They make it super clear in all of the paperwork ? you take exactly what you won, or you take nothing."

And what about that trip to sunny Acapulco? The tickets are nontransferable, so there is no way to sell it. You had better just kick back and enjoy the beach ... after springing for the sales and income taxes, of course.

Schwartz says she was fortunate to win a small car and other fairly high-quality, relatively salable items. "If I had won the other showcase, it would have been trips, a refrigerator, and a stove," she told Yahoo! Shine. Ultimately, she invested the money she earned from selling her winnings into a food truck business called the Souper Wagon. Even contestants who wind up winning cash prizes don't always benefit though, thanks to their own personal issues. According to ABC, one winner even turned down an actual cash prize of $10,000 since he didn't want to split it with his ex-wife.

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The Price is Wrong. :(

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Anyone who goes on that show, wins prizes, and doesn't think he/she will have to pay taxes for them before taking them home is a fool.

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the-price-is-wrong-bitch-1-8599447a-orig

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I always found it bizarre that the taxes aren't paid for you. That means you're effectively paying for products you wouldn't have otherwise bought.

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The Price is Wrong. :(

 

Nah i think the price i simply outdated.

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Anyone who goes on that show, wins prizes, and doesn't think he/she will have to pay taxes for them before taking them home is a fool.

Not at all. Any reasonable person would expect the prizes you win to be all-inclusive, without hidden costs.

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I always found it bizarre that the taxes aren't paid for you. That means you're effectively paying for products you wouldn't have otherwise bought.

 

Not sure if I'm correct in saying this, but I've heard that with the McDonald's monopoly game, they actually cover the taxes on it if you win. That's only what I've heard though, but yeah, I guess it can be underwhelming to have to pay taxes.

 

Alternatively, I'd pay $2500 or something like that for a new car, if I can turn around and flip it easily as I'd imagine I could. That alone would still be worth it, imo.

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Not sure if I'm correct in saying this, but I've heard that with the McDonald's monopoly game, they actually cover the taxes on it if you win. That's only what I've heard though, but yeah, I guess it can be underwhelming to have to pay taxes.

My understanding is that prizes in the UK include all the relevant taxes. I think the reason it's different in the US is because of the way that state taxes work, though that's still no excuse for not factoring that into the prizes. If McDonald's do that then that's decent and shows there's no reason it can't be done. All companies should do it.

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The issue with the prizes on that show is that are not money usually. If you win the lottery, you pay taxes on your win. Because it is cash, it isn't a burden. When winning a car, you still have to pay the taxes, but since it isn't money, you can't just not collect that part. That being said, sell the car, pay the taxes, and pocket the profit. Being a brand new car means you can easily sell it directly to a dealership. It really is no different than going to the casino and winning money. You still have to pay taxes because it is still income.

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Remember when Oprah gave everyone a car? Yep, same thing happened. Not many people ended up with a car.

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I think America, as per usual, is quite unique in this.

 

Pretty sure in most other countries wins on quiz shows and in lotteries aren't taxed for precisely the reasons highlighted eg. it's dumb.

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Here in Canada the only thing you would have to pay taxes on is the trip. Which is why Canada doesn't have any game shows now.

 

On an bt the way if you win cash on the prices is wrong, you gotta pay taxes on that also in the US. Depending on your state.

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I think America, as per usual, is quite unique in this.

 

Pretty sure in most other countries wins on quiz shows and in lotteries aren't taxed for precisely the reasons highlighted eg. it's dumb.

Why is it dumb to pay taxes on your income? Just because its televised? There is no difference between the price is right and a professional sporting event. In both, you get paid to entertain. If anything, the price is right does a better job at this since you get paid based on your performance. Wish professional sports would be the same. You take pay cuts when you don't perform well. :shifty:

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They should just make game show prizes tax-exempt.

 

Or at the least give you 5 years to pay off the taxes.

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I never understood the lure of game shows. you are in effect paying for something you supposedly won, the taxes. I wonder how much crap is simply left there because people can't afford the taxes?

 

they probably assume X number of people will not claim the prizes and then recycle the item through to another show

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^ The leftovers go to Jeopardy :p

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Government taxes their people to death

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Of course it's just a gimmick. Nearly everything in America is these days. The little guy cannot beat the system.

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Not at all. Any reasonable person would expect the prizes you win to be all-inclusive, without hidden costs.

 

Americans expect to pay taxes on gifts and prizes, they are classed as earnings over there and they've grown up with it.

 

Why is it dumb to pay taxes on your income? Just because its televised? There is no difference between the price is right and a professional sporting event. In both, you get paid to entertain. If anything, the price is right does a better job at this since you get paid based on your performance. Wish professional sports would be the same. You take pay cuts when you don't perform well. :shifty:

 

Because outside of America, prizes are not classed as income because a prize is not representative of your earnings and possible expenditure. If you earn money, its usually a good show of what kind of money you have anyway. If you are given something, (a.k.a a prize) it doesn't have to stack up to your earnings.  If you get lucky and win a luxury car you might have been too poor to buy otherwise, you might still be able to afford to run it etc outside of the USA. Obviously outside of the USA if you win money, you'll still be taxed on it. Thats because you can afford the tax on the money, because you'd pay with the money you were given. 

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I knew that taxes had to be payed on prizes for a long time. If you got a free car elsewhere, you still have to pay taxes. Even if you didn't have to pay taxes on the car, there is registration fees, insurance, gas etc. There is no such thing as FREE.

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I knew that taxes had to be payed on prizes for a long time. If you got a free car elsewhere, you still have to pay taxes. Even if you didn't have to pay taxes on the car, there is registration fees, insurance, gas etc. There is no such thing as FREE.

 

Obviously a car is different, all the shows I've seen here with a car as a prize also mentions it's pre-taxed and pre-insured for a certain time. But for other prizes, outside the USA it'll be completely free.

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you mean, I can have this $18,000 car, only by paying taxes on its value. what an outrage.

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Is this crap still on TV in 2013?

I used to watch this (UK) in the 80s.

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Americans expect to pay taxes on gifts and prizes, they are classed as earnings over there and they've grown up with it.

 

 

Because outside of America, prizes are not classed as income because a prize is not representative of your earnings and possible expenditure. If you earn money, its usually a good show of what kind of money you have anyway. If you are given something, (a.k.a a prize) it doesn't have to stack up to your earnings.  If you get lucky and win a luxury car you might have been too poor to buy otherwise, you might still be able to afford to run it etc outside of the USA. Obviously outside of the USA if you win money, you'll still be taxed on it. Thats because you can afford the tax on the money, because you'd pay with the money you were given. 

I am not sure why you keep bringing up places outside the US when it has nothing to do with anywhere but the US. It has always been like this. If you earn anything, whether it is money or something worth money, it is income. All income is taxed in the US. It is great that other places don't tax all forms of income, but in the US, we tax every form of income, including inheritance and gifts. This is the US we are talking about so stay on subject. There are plenty of other threads for senseless US bashing but this isn't one of them.

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