Hey everyone me and my dad fished the big bass tour this last weekend on conroe and won the nitro Z19 worth 36000. But we want to trade up to a Z21. And so my question is what are the taxes do we pay sale tax or do we just pay the federal income tax? Any help will be greatly appreciated. Oh we won the tourney by 1/100 of a pound!!!

buddy just went thru that!!
if u bump to a Z21 be ready to add about 24,000.00 to that 36,000.00
6.25 % state taxes on that and you will get a W-2 on the 36,000.00 for the Gov.income tax !!!!!
they ain't FREE !!!!

You get taxed on the retail value and you can only sell it for the wholesale value.

Get a better tax attorney....

But seriously, if you immediately sell it, you should be able to write off the difference. I would expect that the net result of your tax liability would be based on the amount it was actually worth in trade, not the stated retail value.

I really have no idea.

This happened a few years ago but may still be relevant. I played in a Club Charity golf tournament and a friend of mine in the foursome had a hole in one and won a new Lexus. He kept the car but paid sales tax on only the amount he could reasonably expect to pay a dealership for the car, not list price. Could be the same for a boat.

Congratulations to your Dad !!!! We fished it too, nothing but short fish.

Congrats on the win. Your dad no longer guides on conroe?

Per the IRS

"Subject to certain exceptions, the cash value of prizes or awards won in a drawing, quiz show program, beauty contest, or other event, must be included on the tax return as taxable income.
Taxpayers must also report the fair market value of merchandise or products won as a prize or award, as taxable income.
For example, both a $500 cash prize and the fair market value of a new range won in a baking contest must be reported as other income on Form 1040, Line 21."

Winning the boat is just like winning money when it comes to the IRS.

Edit: Just make sure to mark it as "Not subject to Self employment Tax"

My fishing buddy and I won a boat on Fork and immediately sold it. Paid taxes on the amount we sold it for. Don't know if the law has changed but that's what we did.

Like others have suggested, call your CPA or if you don't have one then find one you will use. There are several ways to reduce the tax liability on your win, but its definitely income regardless if you upgrade to a larger boat or not. The income is based on what you won, not the difference in what you upgrade too.

This is how it works. Doesn't matter what you sell it for. I won a truck & boat at Fork a few years back. Bass Champs sent me a 1099 on the taxable amount on the truck and the boat. I had to pay income tax (not sales tax) on the two amounts. Here is the kicker, if the boat won throws your dad into a higher tax bracket, he will have to pay the higher tax rate on the amount on the 1099.

If you take the boat won and trade it in on a more expensive boat, then you will get the trade in value sales tax credited in tax credit off the new more expensive boat. Capiche?

Congrats on the win.

It's best to just ask us and we'll tell you the information you're looking for rather than speculating on the board here. Keith should have provided his email to your dad on Sunday after the weigh in so we can take it from there. Congrats again on the win.

Thanks for the info. And the Wayne Whitehead that guides on Conroe is a few years older than my dad they are not the same person lol. We had that question asked when we brought the winning bass in lol. And today we are going to tracker marine so I'll let everyone on here how it actually goes.

Oh and as far as higher tax bracket he is retired and doesn't have an income so hopefully that will give him a break too.