If you won, would you take a genuine '65 Sheby GT 350H or $100,000 in cash?

[Cannoball888]

The IRS is going to want roughly 35% - 40% of whatever you get. Been there, done that. If the car is valued at $250,000 then you'll have to pay $87,500 in taxes (at 35%). If you take the $100,000 cash, you'll pay $35,000 in taxes (again, at 35%). Plus, if you take the cash you'll actually have the money to pay the tax which you probably won't have if you take the car (at least I woudn't). Also remember that this will be added to your current salary as income for the current year. Unless you are currently making $250,000/year or more this is going to put a serious hurt on you tax wise.

You may be able to tweak these numbers a bit, depending on your personal circumstances and the creativity of your accountant, but the bottom line is that unless you have $80,000 or more in available cash to pay the taxes you're probably better off to take the cash instead of the car. I'm not a tax expert, so it may be possible to take the car and sell it quickly enough to make it worth your while, but my guess is that's a gamble.

Pay $80,000 in taxes just to keep the car? Like you wrote, most folks couldn't do it. I agree---sell it quickly for $250,000, pay the IRS $87,500 and net yourself $162,500.

 

[69 Rustang]

The IRS is going to want roughly 35% - 40% of whatever you get.

Depending on the State you live in, I would imagine they want their cut too. Add that to your total (or subtract it.... ).

 

[spyne]

Depending on the State you live in, I would imagine they want their cut too. Add that to your total (or subtract it.... ).

Yep, I didn't factor that in at all. Takes all of the joy out of winning something like this doesn't it...