What is the tax consequence of winning a raffle prize?

September 15, 2006

Date:  Fri, 16 Jun 2006
From:  Khanh

What is the tax consequence of winning a raffle prize? Which prize would have a better tax result: a home worth $800,000 or $500,000 in cash?

Thank you.

Answer

Date:  30 Jun 2006

Hello Khanh,

Raffle prizes are taxable income. The tax for a home worth $800,000 would be higher than for $500,000 cash. The home would still be a better prize, after income taxes. If you wanted to keep the home, you could probably borrow the money using a mortgage secured by the home to pay the tax.

Good luck!


Mike Gray

For answers to new questions, subscribe to our newsletter, Michael Gray, CPA's Tax & Business Insight by filling out the form below.


Home    Newsletter Archive    Introducing Michael Gray, CPA    Articles    Tax FAQ   Need Help?    Other Links


Michael Gray, CPA
2482 Wooding Ct.
San Jose, CA 95128
(408) 918-3162
FAX: (408) 938-0610
Hours: 8am - 5pm PDT Monday - Friday

© 2025


Connect on LinkedIn
Connect on BlueSky
Connect on Instagram
Our Blog

Subscribe to Michael Gray, CPA's
Tax & Business Insight


We respect your email privacy