When you win a boat/vehicle in a tournament...(paying taxes)

Are you required to pay the sales tax upfront right away? Or can you hold off on putting title in your name for say 30 days and then just turn around and sale it and leave the taxes to the new buyer?

Whoever registers them pays the taxes for them.

if you own it at the end of the year you pay taxes. That's why those certificates get so cheap at the end of the year. The tournament will 1099 you the full retail value of the boat, if you own it you will owe taxes on that amount, if you can sell it you can take the difference between the 1099 value and what you actually sold it as as a loss, or at least that's what my CPA let me do in the past.

Texas4 if you have the property and the 1099 at the end of year you will own INCOME taxes on it, when you register it you are paying SALES tax, it's a nasty double whammy

He was asking about SALES tax.....just sayin'

but one I hope to face again in the near future!

Wow really? That sucks. So do any of you ever right it off as business use? I would think that would help some. I'm guessing most people just sell them before the end of the year?

a declared value is taxable - the feds are really watching the income( winning income ) part also- when you win it , it is fed taxed even if you sell it before the end of the year - as a won gift is - if you win a car on a game show or boat fishing - it is income - taxed at a rate seperate from other income - once the SS # is reported the feds have you in their sights

YES, save EVERY receipt, every year. You never know when you're going to hit a big one and you need the receipts to offset the income.

Which receipts?

anything and everything having to do with fishing from boat gas to milage to motel ,eats,tackle buying a new boat to repair work on boat and truck if use to pull your boat to entry fees, like I said anything ang even the baathroom sink ....lol!!!!

make sure you have allllll your reciepts... because claiming fishing as a job instead of a hobby(writing off expenses which is a profit/loss statement).... claiming fishing as a job while you have another job... is a red flag. It can be done, BUT, like i said, have all your receipts. I was audited for making a profit/loss statement one year.. but with all my reciepts I checked out just fine the lady auditor told me it was because i showed fishing as a job along with another job.

btw-- she said she had no idea why they were wasting both our time, because she had seen some guys who couldnt account for more money that I make in 2 years..... i was a small fry and wasting her time.

I've been wondering about this since I plan on winning one soon....

its legit... anytime you have a 1099-misc, that means you can doa profit/loss statement to accompany it. it's just a means for the government to bully you to make sure you arent cheating on your taxes. There's nothing to worry about if you have all your receipts. it's just a PIA to take the time to sit through the audit. but may be worth it if it saves you 5x what your daily rate of pay is(for taking a day off).

Ronnie, you are easy prey that is why.

I too was audited back in 96 for this same reason. I was told that they have a ratio to fill and their goal is to find something and they get dinged if they don't. I don't know how but they do.

I was guiding and working a job. Thought they were going to disallow all my mileage because they said that each lake was my office and that I could not take the mileage from home (office) to the lake as a deduction. That was the broad statement, after further research during the visit, it was only the mileage that was less than 100 miles. I had like 11 trips that were 99 miles (yes less than 100) because I elected to go another way. That was all they could find. I tallied it up, wrote them a check for $175 for mileage, penalties and interest and was out of there.

For all those that have a difficult time keeping receipts, I would suggest that you use another credit 100% for fishing related expenses, this is acceptable as well from what I am told. Mileage easy just mapquest and record it

i also had child support start that year, which may have helped trigger the audit.

i keep everything, we list fishing as a seperate business line and file a schedule C for it. There are some rules re: whether something is a "hobby" or a "business", which largely revolves around if there is profit motive or not. If it is a hobby you can't do this, and I have heard of some guys that file a schedule C and write off all their fishing expenses, take whatever winnings they have as income and wind up the end of the year with big losses which they use to offset their adjusted gross income. That seems to aggressive to me since all of us go fish for fun sometiimes. However if I drive to a lake, pay an entry fee, stay in a hotel, buy $25 a gallon TCW3, etc I have a "profit motive", I'm there trying to win money. So I take all that as business expense on my tournament fishing schedule c. I only take it down to the level of my winnings, I haven't take a loss except in years just after the ones where I have had large gains. By the way I am not an accountant and all of the above may make it sound like I know more than I do, just been doing this a long time. Actually think I made a B in accounting in college, so don't take this as tax advice, talk to a professional! If there's a CPA on here sounds like there may be a way to drum up some business by weighing in.

SkeeterDon that mileage thing is aggressive, but since you were guiding I would see why the service would allow. I just try to fly under their radar by only reducing that 1099 income SRonnie mentions above. So curious, you guys are both named Skeeter, as Lt. Dan said "You boys brothers"?

Wish I could have that problem.

SkeeterDon is right. For those that plan for this hobby to become a business, go down and get an assumed name certificate at the court house, might also consider an LLC, develope a business plan geared towards making a living in the industry, then get a good CPA that has clients that are fishermen/guides/pros. Makes all the difference in the world. Virtually every penny you spend for the "Business" can become a tax deduction. Government will even give you .18 per gallon back for all the gas you put in your boat.

getting some gas back would be awesome....

too bad I do not win enough money to get a 1099..