Jake said:
Cash money winnings are taxed about 40% right? I think that "gift" winnings are taxed less though. If the boat/motor/truck/trailer was taxed 40% I'd put the truck on eBay IMO. anyways, congrats again on the catch!
Jake
Jake,
This is how I understand it....I have been wrong before though.
Prizes and cash winnings are just taxed as additional income. The Star trout division prize is a 22' Shoalwater (I think?)...so let's say that fair market value is $30,000.
If you are a single guy making $40K per year, your tax rate on the boat would be 25%, leaving you a bill of $7500. Not too bad for a new boat.
If you are single guy making $350K, your tax bill would be 35%, leaving you a bill of $10,500. This guy in this example is not sweatin' the $10K bill, and probably already has a nicer boat.
Either way, they will only be taxed at 35% max, and we don't have a state income tax to worry about.