Imagine Winning "Free" Tickets That Cost You $19,000
Well, American Airlines valued each ticket at $2,200 for a total prize worth $52,800 (24 X $2,200 = $52,800). If you are familiar with prizes, you'll know that they are taxed as income. This guy lived in New York City and figured that when it was all said and done, his tax bill for the prize would be over $19,000 or $794 per ticket.
To make matters worse, the tickets had to be used within 12 months and also were not transferable and could not be redeemed for cash. I think I would turn them down too!
Tag: Taxation of Prizes