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#1
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AOPA Plane Giveaway and Taxes
Does anyone know if there would be tax consequences for the lucky winner
of the AOPA Commander 112. Thanks!! Jon Kraus '79 Mooney 201 4443H @ TYQ |
#2
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AOPA Plane Giveaway and Taxes
Taxable income.
"Jon Kraus" wrote in message m... Does anyone know if there would be tax consequences for the lucky winner of the AOPA Commander 112. Thanks!! Jon Kraus '79 Mooney 201 4443H @ TYQ |
#3
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AOPA Plane Giveaway and Taxes
I would assume that the retail value of the aircraft would need to be
added to your 1040 as regular income. Just like lottery winners, game show winners, etc. - - - - Al Jon Kraus wrote: Does anyone know if there would be tax consequences for the lucky winner of the AOPA Commander 112. Thanks!! Jon Kraus '79 Mooney 201 4443H @ TYQ |
#4
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AOPA Plane Giveaway and Taxes
Jon Kraus wrote:
Does anyone know if there would be tax consequences for the lucky winner of the AOPA Commander 112. Thanks!! The winner will pay Federal income taxes. Most States also have an income tax, and the winner will pay that if he or she lives in one. Many States will also charge a sales or usage tax. Living here in New Jersey, I would pay 12% of the value of the plane to the State. I'm no longer sure what the Federal tax percentage is. It used to be about 33%. If it still is, the total tax bill would be 45%. George Patterson We don't stop playing because we grow old. We grow old because we stop playing. |
#5
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AOPA Plane Giveaway and Taxes
In a previous article, George Patterson said:
Jon Kraus wrote: Does anyone know if there would be tax consequences for the lucky winner of the AOPA Commander 112. Thanks!! The winner will pay Federal income taxes. Most States also have an income tax, and the winner will pay that if he or she lives in one. Many States will also charge a sales or usage tax. So do they valuate the aircraft at the fair market value (ie. what a normal Commander 112 of that age would fetch), or do they add all the ridiculously expensive add-ons (none of which AOPA actually pays for, since it's free advertising for the supplier) to that price and value it at an amount that you'd never be able to sell the plane for in a million years? -- Paul Tomblin http://xcski.com/blogs/pt/ I mean, if went 'round saying I was a perl hacker, just because some moistened bint lobbed a "Perl for Dummies" at me, they'd put me away! -- Randy the Random |
#6
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AOPA Plane Giveaway and Taxes
Paul Tomblin wrote:
In a previous article, George Patterson said: Jon Kraus wrote: Does anyone know if there would be tax consequences for the lucky winner of the AOPA Commander 112. Thanks!! The winner will pay Federal income taxes. Most States also have an income tax, and the winner will pay that if he or she lives in one. Many States will also charge a sales or usage tax. So do they valuate the aircraft at the fair market value (ie. what a normal Commander 112 of that age would fetch), or do they add all the ridiculously expensive add-ons (none of which AOPA actually pays for, since it's free advertising for the supplier) to that price and value it at an amount that you'd never be able to sell the plane for in a million years? A normal Commander of that age wouldn't have all of the upgrades so you can't use that as fair market value. I would hope they would have the airplane appraised by someone who does that for a living to get a reasonable value. Yes, you can't just add up the cost of the upgrades, but you certainly can't take the market price of a standard Commander either. I wish AOPA would include a cash prize that would at least cover part of the taxes. I saw a lame excuse as to why they couldn't do this, but the folks at Kiplinger Personal Finance do this and they should know the tax laws at least as well AOPA. Matt |
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AOPA Plane Giveaway and Taxes
Paul Tomblin wrote:
So do they valuate the aircraft at the fair market value (ie. what a normal Commander 112 of that age would fetch), or do they add all the ridiculously expensive add-ons (none of which AOPA actually pays for, since it's free advertising for the supplier) to that price and value it at an amount that you'd never be able to sell the plane for in a million years? Basically, you're stuck with what they paid for the plane, plus the price of all the add-ons. Just as if you bought the plane for that price and paid to have all that work done. You can try getting an appraiser to produce a value for the plane, but that won't fly with the State of New Jersey (dunno about the Feds). The only way I know to pay taxes on a lower value is to sell the plane for less. Selling the plane automatically determines the market value. George Patterson Coffee is only a way of stealing time that should by rights belong to your slightly older self. |
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AOPA Plane Giveaway and Taxes
"George Patterson" wrote:
Basically, you're stuck with what they paid for the plane, plus the price of all the add-ons. Just as if you bought the plane for that price and paid to have all that work done. You can try getting an appraiser to produce a value for the plane, but that won't fly with the State of New Jersey (dunno about the Feds). That ain't the IRS position. The number on Form 1099 is to be fair market value, and indeed the value of all the "stuff" added may not reflect final FMV, as other posters have noted. What does often happen with issuers of 1099s is they think if they don't put an "optimum value" on the 1099, they get into trouble with IRS. Nonsense, as they have no enforcement program for this on the payer side, and in fact IRS would rather not get into audit hassles where the winner claims a justified, lesser value on Form 1040. Fred F. |
#9
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AOPA Plane Giveaway and Taxes
Just because you stuff new stuff inside doesn't change the fact that the
airframe is xx-years old. Last I checked, an xx-year old airframe doesn't have the same value as one fresh out of the factory. Likewise, the value of the new stuff stuffed inside the xx-year old airframe won't have the same value as the same stuff in a box on the shops shelf. Once installed, it becomes used equipment and is devalued accordingly. |
#10
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AOPA Plane Giveaway and Taxes
TaxSrv wrote:
That ain't the IRS position. The number on Form 1099 is to be fair market value, and indeed the value of all the "stuff" added may not reflect final FMV, as other posters have noted. I agree with Fred here. In the case of something like a "New Car" the IRS will consider the value to be the MSRP. However since this isn't the case, some acceptable appraisal technique (blue book, etc...) will apply. |
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