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

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

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

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.

On Sun, 27 Nov 2005 16:59:41 GMT, B A R R Y
wrote:

On Sun, 27 Nov 2005 16:50:05 GMT, Jon Kraus
wrote:

Does anyone know if there would be tax consequences for the lucky winner
of the AOPA Commander 112.

It would depend on your Federal bracket, and your state and local
obligations, applied to the market value of the prize.

Back when rec.aviation participant Margaret Puckette won the AOPA Archer, AOPA
did do some work to lower the valuation of the aircraft, so she didn't have to
pay taxes on the full retail value. However, she was still stuck with a ~$35K
tax bill.

Ron Wanttaja

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

Ron Wanttaja wrote:

Back when rec.aviation participant Margaret Puckette won the AOPA Archer, AOPA
did do some work to lower the valuation of the aircraft, so she didn't have to
pay taxes on the full retail value. However, she was still stuck with a ~$35K
tax bill.

Rush right off and get that aircraft assigned to some business, then start
taking the aggressive depreciation on it! ;-)

--
Peter

The lucky winner can cover the income taxes by simply
giving the airplane to me, and I'll pay the taxes for them. :-)



"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

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

B A R R Y writes:

[...] Go find a '75 Cherokee with the original equipment, now find
a similar plane with "ridiculously expensive add-ons", like a glass
cockpit. The market values will differ, possibly
exponentially. [...]

I wonder - when you say "exponentially", do you mean "mathematically
related to the function e**x"? Or do you mean simply "a lot"?

- FChE