From:  Keeshan
Date:  Fri, 11 January 2002

I was on a game show a few months ago and won a substantial amount of money ($45,500 in cash and $2,500 in prizes). What would be the tax on something like this?

Does the luxury tax apply?

Answer

Date:  January 2002

Hello Keeshan,

Game show prizes are taxable income. You should receive a 1099 for the prizes you received and report them as miscellaneous income. Sometimes, income taxes are withheld from cash prizes, in which case you should attach the 1099 to your income tax return.

Luxury tax only applies to the purchase of a luxury vehicle.

Good luck!
Mike Gray

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