If you win the prize on a game show in California you have to pay a 10% withholding tax at the conclusion of the filming of the show. So if you didn’t win cash or bring a stack of hundreds with you it may be necessary to sell the prize on the spot. However, if you sell the prize before you use it you can probably claim whatever you sold it back for as the value for income tax purposes. On the other hand, if you use the prize at all you will have to claim the full retail price as the value even if you sell it for significantly less the next day.
If you have tax questions, give us a call at 816-524-4949 or visit our website at www.Hoorfarlaw.com.