Can't live without a ticker!!!!
- Sep 6, 2000
Not high at all. It's called "Gift Tax" and it's paid on any winnings of prizes or sweepstakes.The taxes would be $2000 on a ~$6000 prize? I have never won anything major but 33% seems very high!
This from an IRS for Dummies website:
"You pay heavily on winnings of gain or cash or prize. What is not widely known is a thing called "the gift tax". It means you are taxed at 50% or more of the winning amount, or gift value. Federal, state and local combined wipes out 60% of the value of the cash or prize, normally."