Any tax accountants in the house?

[JamilJaeJamailJrJuan]

I won a drawing for a brand new SUV, and I don't know if I should take the car (valued at $26,250) or cash offer of $20k. I personally don't really want the car, but my fiancé could use a new vehicle. I have to decide by tomorrow.

My options are as follows:

-take car valued at $26,250. My understanding is that I get the car free of cost (all transaction taxes and registration etc included) but presumably I will have to pay taxes on the win next tax season as "gambling winnings". From what I can gather online, I think this would be about 1/3 the value of the car in taxes next tax year. Not sure I really want to pay $8-10k in taxes on a car I don't really want/need if this is accurate. But again, my fiancé could definitely use it.

-take $20k in cash with a 1099. I would have to pay taxes on winnings next spring, but have the cash to do so in this scenario. I am a frequent recreational poker player (where I won the drawing) and I could net poker losses against these winnings, I assume. Would same be the case if I took the car - ie: could I net gambling losses against the tax hit I will take if I take the car?

-take car, sell back to dealership for $22k. Dealer has told me he would give me at least $22k. Would I get doubled taxed in this scenario on the win and the sale? Any reason I should avoid this scenario to get the extra $2k in this case if I decide to go the cash route.   

I am trying to figure out what is the best value for me and my clock is ticking. I really appreciate any input anyone can provide!! Certainly a good and unexpected problem to have!

[4everwarriors]

Take the bread and buy da wheels ya want. Still wood get all da benefits of providing your lady friend wit a knew ride, hey?

[warriorchick]

Tax isn't my area of specialty, but let me give you the quick and dirty answer as far as I understand it.

It depends on the 1099 you are going to get.  If the dollar amount on the 1099 is more if you take the car, take the cash.  You can net your documented gambling losses off of either one.

But it might be worth it to spend the money to ask an actual tax professional. It shouldn't be all that much for one straightforward question, and they might give it to you as a freebie in hopes of getting the opportunity for more business.  That would be better than sitting in the IRS office a 2-3 years from now saying, "but some person on a sports fansite whose real name I don't know told me...."

[JamilJaeJamailJrJuan]

Tax isn't my area of specialty, but let me give you the quick and dirty answer as far as I understand it.

It depends on the 1099 you are going to get.  If the dollar amount on the 1099 is more if you take the car, take the cash.  You can net your documented gambling losses off of either one.

But it might be worth it to spend the money to ask an actual tax professional. It shouldn't be all that much for one straightforward question, and they might give it to you as a freebie in hopes of getting the opportunity for more business.  That would be better than sitting in the IRS office a 2-3 years from now saying, "but some person on a sports fansite whose real name I don't know told me...."

Hah, yah. I've got a call into my CPA. I won't be able to connect with him until Monday. Just trying to brainstorm in the meantime.

The 1099 is going to $26,350 for the car, $20k for the cash.

[warriorchick]

Hah, yah. I've got a call into my CPA. I won't be able to connect with him until Monday. Just trying to brainstorm in the meantime.

The 1099 is going to $26,350 for the car, $20k for the cash.

This seems like a no-brainer to me.  You don't even want the car.  Take the cash.

[JamilJaeJamailJrJuan]

This seems like a no-brainer to me.  You don't even want the car.  Take the cash.

Not quite that simple. My finances car has 140k miles on it. It's on its last leg and will likely need to be replaced within next 6 months. Obviously I personally would prefer to take the cash, but also seems a little silly/selfish to pass on a new brand new car my better half needs to pad the bank account.

[ATL MU Warrior]

Not quite that simple. My finances car has 140k miles on it. It's on its last leg and will likely need to be replaced within next 6 months. Obviously I personally would prefer to take the cash, but also seems a little silly/selfish to pass on a new brand new car my better half needs to pad the bank account.

Take the money, claim less.  Buy a car your fiance really wants.  Double win.

[warriorchick]

Take the money, claim less.  Buy a car your fiance really wants.  Double win.

Exactly.

Plus, you aren't married yet.  You can offer to loan her the money to buy a car.   

[jsglow]

Take the money, claim less.  Buy a car your fiance really wants.  Double win.

That's how I see it too.  Now you have money to buy a car.  The flexibility the cash provides to pay your own tax bill next year plus buy the car you want (maybe even gently used if you guys do that) outweighs the inflexibility of the asset you'd get.  The  financial gap has to be pretty wide between the two options for the fixed asset to provide you with greater utility.  I know you're asking a tax question.  But I think like an economist and evaluate options that way.

Congrats!

[JamilJaeJamailJrJuan]

Take the money, claim less.  Buy a car your fiance really wants.  Double win.

Yep. I have admittedly backed myself into a bit of a corner. I was so excited about winning the car that I immediately told her. Now of course she wants the car. Probably should have just taken the cash on the spot.

It's a pretty cool car, just not for me. 2018 Nissan Rogue SV midnight edition fully equipped. I'm just not really the type of guy to drive a crossover.

[GGGG]

Yep. I have admittedly backed myself into a bit of a corner. I was so excited about winning the car that I immediately told her. Now of course she wants the car. Probably should have just taken the cash on the spot.

It's a pretty cool car, just not for me. 2018 Nissan Rogue SV midnight edition fully equipped. I'm just not really the type of guy to drive a crossover.

IMO it depends on how much she like the car.  If she wants that car, might as well take it and sell hers to pay the taxes.

[jsglow]

Yep. I have admittedly backed myself into a bit of a corner. I was so excited about winning the car that I immediately told her. Now of course she wants the car. Probably should have just taken the cash on the spot.

It's a pretty cool car, just not for me. 2018 Nissan Rogue SV midnight edition fully equipped. I'm just not really the type of guy to drive a crossover.

Well, you two guys need to sit down and talk about this.  Clearly she's involved in the decision but the question you have to ask yourself is whether this is the car you want.  If you wouldn't even consider it other than the fact that someone handed you keys, you have some good guideposts to follow.

Again, congrats.

[MUBurrow]

Yep. I have admittedly backed myself into a bit of a corner. I was so excited about winning the car that I immediately told her. Now of course she wants the car. Probably should have just taken the cash on the spot.

What I mean is, do you think she'd go behind your back, try to hamstring you?

[Dr. Blackheart]

Yep. I have admittedly backed myself into a bit of a corner. I was so excited about winning the car that I immediately told her. Now of course she wants the car. Probably should have just taken the cash on the spot.

It's a pretty cool car, just not for me. 2018 Nissan Rogue SV midnight edition fully equipped. I'm just not really the type of guy to drive a crossover.

The Spouse Tax may be bigger than the income tax burden then.  A few shekels to Uncle Sam now may be better than a frying pan for life.

[jsglow]

What I mean is, do you think she'd go behind your back, try to hamstring you?

Well played.  3 bottles of suds for you.

[warriorchick]

The Spouse Tax may be bigger than the income tax burden then.  A few shekels to Uncle Sam now may be better than a frying pan for life.

Wow, the frying pan trope is still a thing?

[MU82]

All else being (relatively) equal, make the spouse happy. (or in this case, spouse-to-be)

That's what this guy who's been happily married for 34 years says, anyway.

She already knows about the car, likes the car and wants the car. I'd give her the car.

Happy Wife Happy Life (or Happy Husband Happy ... Um ... Lusband) sounds trite, but it's pretty realistic.

[Jay Bee]

1) cash
2) pics

[GooooMarquette]

Wow, the frying pan trope is still a thing?

Yeah, but now it's BPA-free....

[reinko]

Yep. I have admittedly backed myself into a bit of a corner. I was so excited about winning the car that I immediately told her. Now of course she wants the car. Probably should have just taken the cash on the spot.

It's a pretty cool car, just not for me. 2018 Nissan Rogue SV midnight edition fully equipped. I'm just not really the type of guy to drive a crossover.

The Rogue has not been drastically redesigned over the past few years, and you can pick up 2016 SV with low miles for like $18K, problem solved. 

[real chili 83]

Give the money to me.

[ZiggysFryBoy]

Get a guarantee on post marital Jay Bees.

[Juan Anderson's Mixtape]

Dump the girl, take the cash, fly to Vegas with your buddies for a week, live like high rollers, find some new ladies, live it up, fly home, tell your girl "there never was a car, that was just a pre-marriage test" about shallowness/materialism, ask her to take you back, get married, live happily ever after.


April fools.

[Herman Cain]

You just got your woman a new car for 8k. Take the car. The after tax on the cash is roughly 12k so what kind of car will you get for that?

The other way to look at is 8,000/300=26.667 which is your breakeven point on the investment. You will understand that better when your married.

[JamilJaeJamailJrJuan]

Thanks for the suggestions and tips all.

I took the car. The fiancé is pretty pumped about it. Turning down the cash was tough, but i made the better long term decision.