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Prizes to avoid on a game show
Drew Carey presides over a jubilant contestant on The Price is Right
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TEXT OF STORY
Scott Jagow: The TV hit "Deal or No Deal" went back on the air this week, still searching for the first million-dollar winner. But as with most of the game shows, people get to choose cash or prizes. So, which should you take? Survey says! Well, actually Jeff Tyler reports.
Jeff Tyler: Driving in Los Angeles, Alissa Chirchick noticed a billboard for the game show Crosswords and thought:
Alissa Chirchick: Well, I'm good at crosswords. I need to make some cash to get out of some debt. Why not go for it?
She won almost $10,000, plus a week in Hawaii.
Chirchick: I actually chose not to accept that gift, because of the taxes I would end up having to pay on it.
The IRS classifies merchandise and gifts as income.
Steve Beverly has interviewed more than 400 game show winners. His advice:
Steve Beverly: Make sure that the winnings would be in cash.
That means steering clear of this show:
Price Is Right: Come on down. You're the next contestant on "The Price Is Right."
Beverly says the showcase goodies won't seem so great come April 15.
Beverly: That's nice to think that I have four cars, or that I've got three boats. But they are also adding to your tax bill, and you don't have additional cash to pay them off.
But before you can worry about taxes, you need to win. Beverly says your best shot is on:
Beverly: "Who Wants to be a Millionaire" is still king of the pay-outs, because it's scaled for someone to get into six figures. Or at least upper-five figures.
Your odds on most game shows are better than in casinos or lotteries. Statistics professor Jeffrey Rosenthal is the author of "Struck by Lightning: The Curious World of Probabilities."
Jeffrey Rosenthal: You're more likely to be killed in a car accident driving to the store to buy your lottery ticket than you are to actually win the lottery jackpot.
The odds of winning that jackpot are 1-in-14 million. Compare that to a show like "Deal or No Deal," where players have a 1-in-26 chance of picking the briefcase with a million dollars.
Deal Or No Deal: So all you have to do is pick the case with a million dollars. That's all you have to do.
All you have to do to get on a game show is survive an interview. Demonstrate enthusiasm, don't curse and show that you won't freeze like a deer in headlights when the show goes live.
In Los Angeles, I'm -- oh, I know this one -- Jeff Tyler for Marketplace.
What the story fails to mention, though, is that cash winnings are STILL taxed and considered income. I was a contestant on Jeopardy! back in 2003 and was still taxed on the $2,000 I won there.
It's also not necessary to "steer clear of The Price is Right", as all shows give you the option to forfeit prizes won. That way, you don't have to pay taxes on them.
I won a new Corvette automobile at a Las Vegas casino. I had the choice of $34,000USD or a new vehicle of my choice from the nearby dealership. Most prizes require that the winner must take title to only that display auto, boat, etc., which I did not want. I had never even driven a Corvette! I selected exactly the model I wanted, and I still own it. I had to pay about $13,000 in total additional taxes, as I recall, but it was a once-in-a-lifetime win. The additional taxes other than Federal were for state registration and sales tax. If I had won it as a young man, however, I probably would have crashed it by now!
