When Oprah gave away Pontiac G6 sedans to her TV audience, was thevalue of the cars taxable?On Labor...

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When Oprah gave away Pontiac G6 sedans to her TV audience, was thevalue of the cars taxable?On Labor Day weekend in 2006, World Furniture Mall in Plano,Illinois, gave away $275,000 of furniture because the Chicago Bears shut out the Green Bay Packers in their football season opener at Lambeau Field in Green Bay XXXXXXXXXXWas the free furniture in the form of a discount or rebate taxable, or should the furniture company hand the customers a Form 1099-MISC?
	
Document Preview: When Oprah gave away Pontiac G6 sedans to her TV audience, was thevalue of the cars taxable?On Labor Day weekend in 2006, World Furniture Mall in Plano,Illinois, gave away $275,000 of furniture because the Chicago Bears shut out the Green Bay Packers in their football season opener at Lambeau Field in Green Bay XXXXXXXXXXWas the free furniture in the form of a discount or rebate taxable, or should the furniture company hand the customers a Form 1099-MISC?

David · Accepted Answer

INTRODUCTION 
Gifts and prizes are often understood interchangeably as in both the cases there is no 
consideration being paid for possession, but tax treatment in both the cases differ a lot. A 
particular transaction is gift when it is motivated by love, kindness, sympathy, generosity, 
admiration, or similar emotions.  In case of Gift transaction, taxes are to be borne by the person 
giving gift because transfers are added to the income of the person who is giving Gift, whereas 
in case gifts are given in kind, their fair market value is ascertained and same is taxed. In case 
of prizes, awards, gambling winnings are taxable in the hand of recipient. The basic motive 
behind giving prize is business motive and transfers are taxable, whereas in case the prizes are 
received in kind, Fair market Value of the asset is ascertained and same is taxed.

When Oprah gave away Pontiac G6 sedans to her TV audience, was the value of the cars taxable? On Labor Day weekend in 2006, World Furniture Mall in Plano,Illinois, gave away $275,000 of furniture...

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