So I was going to mail in a check this weekend for a raffle drawing for an outfitted stone sheep hunt in the Yukon that was valued at about $45,000. Then I started thinking about if I actually won it, how much of a tax bill would I get? Is it basically taxed as ordinary income or are there a lot of other factors that go into it? Yea it'd be awesome to win it but damn, if it gets taxed as ordinary income, that would be a big chunk of change to come up with.
Win a sheep hunt, get a huge tax bill?
- Thread starter Flatrock
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npaden
Well-known member
Yep. You will get a W-2G for the "value" of the hunt. (or at least you should).
I've been seeing a few of these where you win the tag plus enough cash to pay the tax bill.
For noncash raffles it sounds like you might actually have to pay 25% of the value of the hunt so they can send that in to the IRS before they even give you the prize.
https://www.irs.gov/pub/irs-tege/notice_1340.pdf
I've been seeing a few of these where you win the tag plus enough cash to pay the tax bill.
For noncash raffles it sounds like you might actually have to pay 25% of the value of the hunt so they can send that in to the IRS before they even give you the prize.
https://www.irs.gov/pub/irs-tege/notice_1340.pdf
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EYJONAS!
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There is definitely no such thing as a "free lunch" on that stone sheep hunt if its the one I'm thinking of. On top of the tax situation there are a few other fine print items included in that package that can add up to be a hefty bill it self. I'd be curious to hear Gomer chime in to get his thoughts.
Holy smokes! I've won a firearm here and there and little odds and ends though never a hunt. Makes me second think placing tickets / raffles in for such... though I suppose if I was lucky enough to draw, a once in a lifetime type hunt would be worth the $... I hope. 
Something to consider.
Something to consider.
EYJONAS!
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Definitely a hell of a deal no doubt and I'd gladly pay, especially for a stone.
Yea it could be. 500 tickets. There's probably 6-8k in additional expenses plus (hopefully) a taxidermy bill. I would figure 10k in addition to the tax bill. Probably looking at a solid $25,000 if I won it. Yea that's a lot cheaper than paying outright but damn, that's still a big pile of money.
npaden
Well-known member
I'm curious what the "value" of some of the non-guided raffle licenses are for things. I'm guessing most organizations use the actual cost of the license.
I think that's the way the state sponsored supertag type raffles work. They sure don't value them at the same price those same tags are getting auctioned off at.
I think that's the way the state sponsored supertag type raffles work. They sure don't value them at the same price those same tags are getting auctioned off at.
EYJONAS!
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Hell for 25k a guy would be better off pulling a "Johnserson" and taking that money and buying a couple items vs. a Stone Sheep. If I came home and told my wife "your never gonna believe this, I WON A STONE SHEEP HUNT!" its only gonna cost $25K vs. 45. She'd say good for you looks like your not going!
You could buy 2 cancelation sheep hunts for 25k maybe 3. Just food for thought.
You could buy 2 cancelation sheep hunts for 25k maybe 3. Just food for thought.
devon deer
Well-known member
Blimey that's rough, I have finally found something we do better in the UK, no tax payable on any prizes....then again we don't have any hunts like that either.
Cheers
Richard
Cheers
Richard
D
Deleted member 18333
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No need to worry. That sheep hunt is mine!
D
Deleted member 28227
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Never even considered that... I won a trip 15 years ago and never paid taxes or got a W-2G, I was just sent some gear and a plane ticket... wasn't even asked for my social.
lonedave
Active member
Interesting. I never thought about the tax implications. I'd assume the IWS foundation would have included that little tidbit of info as it could/would make it a no-go for the average guy. I'm wondering if the value info would be from the Yukon based outfitter or from the IWS foundation. If the Yukon outfitter, why would he need to notify the IRS? If the IWS foundation, wouldn't they state a lower value if they had to buy the hunt (assuming they got a break on the price)? Just a couple of questions I need to figure out before I add $44,500 to my gross for the year!
LuketheDog
Well-known member
If you win a trip donated by a Yukon or BC outfitter why would you have to pay taxes to the US? Services rendered by outfitter are in another country...
*I don't know the answer, I'm not a CPA...
*I don't know the answer, I'm not a CPA...
RobG
Well-known member
It looks like the group conducting the raffle has the option of paying the tax as part of the prize. Something to consider before you win a free $25k tax bill.
LopeHunter
Well-known member
As US citizen, you owe taxes no matter where the benefit arose. If you reside in a foreign country then you may owe tax there first then you get a credit on your US Federal taxes as file. The US state where you last resided may also treat you as still a resident, though, so may owe tax there as well.
So, the tax man gets his pound of flesh in many ways and many places.
lonedave
Active member
Just got a phone call from Terri at IWS foundation and she said the winner would be on the hook for 5% sales tax, but she didn't know of any other tax. She did say the winner should check with his tax person to be sure though.
VikingsGuy
Well-known member
Unless IWS is “truing it up” (i.e., paying it for you), this is not accurate. Those above are correct, it would be handled just like if your employer gave you a $45,000 bonus check at the end of the year. They should withhold 25%, but regardless of whether they do or do not you have to add it on top of your year’s income (which means paying it fully at the higher marginal rate) and pay what the table says you owe.
lonedave
Active member
Yeah, I was just passing along what she said. I have no doubt I'd be paying income tax as well. In the end, the total from taxes and the other items they list as not covered would set the winner back at least $10k. Definitely an inexpensive stone hunt, but also definitely far from free. I won't tell you if I bought a ticket or not though!!
BrentD
Well-known member
An interesting connundrum. Why would it be any different that going to the store and finding a $180 Stetson on sale for $1.80? Is a raffle really any different? I would expect to pay 5% sales tax on the price of the ticket maybe, but not on the price of the hunt since the winner is not paying that price. And it wouldn't be income any more than the saving on the $1.80 Stetson was income.
I'm sure I would need to pay a lawyer however... Might cost more in the long run.
I'm sure I would need to pay a lawyer however... Might cost more in the long run.
