Imagine Winning "Free" Tickets That Cost You $19,000

There's an article in today's Wall Street Journal about a man who won 12 round-trip airline tickets for him and his wife (12 for each of them so 24 tickets in all) from American Airlines. He decided not to take the tickets. Why?

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

Milan Tomic

Hi. I’m Designer of Blog Magic. I’m CEO/Founder of ThemeXpose. I’m Creative Art Director, Web Designer, UI/UX Designer, Interaction Designer, Industrial Designer, Web Developer, Business Enthusiast, StartUp Enthusiast, Speaker, Writer and Photographer. Inspired to make things looks better.