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Oprah’s car giveaway not totally ‘free’

HA Ha ha.  Wait, that’s not funny.  I want a free car too!  Oprah, pick me! Pick me!

http://www.suntimes.com/output/news/cst-nws-oprah22.html
September 22, 2004

BY LUCIO GUERRERO Staff Reporter

Oprah called the show part of her “wildest dreams” season.

But for many of the 276 recipients of the new Pontiac cars that the talk-show queen gave away last week, there was a bit of reality to come with that dream—they are going to have to fork over thousands of dollars in taxes.

It turns out that free car wasn’t so free.

That’s because while Pontiac agreed to pay for most of the local charges—things like state sales tax and licensing fees—the recipients have to report the cars as income once tax time comes.

By adding $28,500 to someone’s income, it can push them into a higher tax bracket—which means they will have to pay about 25 percent or more of the car’s value in taxes. And for a nearly $30,000 car, that probably means, for most of the recipients, shelling out $7,125 for the “free car.”

And if you live in Illinois, you can expect to tack on another 3 percent or so in state income taxes.

“It’s not really a free car, it’s more of a 75 percent off car,” said Susan Nelson, who was one of three Wheaton College public relations staffers at the show. “Of course, that’s still not such a bad deal.”

Some of the winners, contacted by the Chicago Sun-Times on Tuesday, said they were thinking about the taxes as soon as the announcement came that they would be getting the new cars.

“Some of the people who knew me, my smile looked a little bit forced when I was up there [on the show],” said William Toebe, a suburban Green Bay resident who was at the taping. “That’s because paying the taxes was the first thing that popped into my head.”

“As I was standing up there, the responsible portion of me said, ‘This is very nice, but where am I going to get the money for the taxes.’”

Toebe, who runs a farm, is already thinking of getting rid of the car, though he has yet to pick it up.

Luckily, the recipients weren’t given the car on the spot so they can at least start to save now. Although Oprah seemed to have the winners choose their cars from an enormous lot filled with Pontiac G6 sedans, the cars will actually be delivered to a dealer near each winner’s home.

Some recipients are going to wait a few months before actually picking up their cars so they can figure out how to pay for the taxes.

“We have to pick the car up between Oct. 1, 2004, and Feb. 28, 2005,” said Nelson. “We’ve decided that we are going to wait until the first of the year so we can have all of 2005 and the first four months of 2006 to figure out how to pay for this.”

Heather Lundeen, a physical therapist in Bismarck, N.D., said she has looked into getting a car loan to pay off the taxes.

The tax shock is not much different from the bill that comes to many game show winners. The Internal Revenue Service requires game shows—and every other large gift giver and casino—to report winners to the federal government. It is then the responsibility of the winner to fess up on their tax forms.

But most of the winners still think they got a pretty sweet deal.

“Whenever I get something for free, I always think ‘What’s the catch?’,” said Tiffany Self, one of the three Wheaton College co-workers who went to the show. “It’s actually a blessing. I mean how often will you get a brand new car for $7,000?”


Posted by SPN on 09/23 at 10:04 AM in Celebrity

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