Unusual Income Can Complicate Taxes
BOSTON ( TheStreet) -- IRS agents must be big fans of Oprah Winfrey. Over the years, the talk show queen has certainly done her part to push her fans into their arms.
Every time the soon-to-be-moving-on host surprises her studio audience with a new car or trip to Australia, the taxman at the Treasury Department gets his due.
|Oprah giveth -- cars, trips to Australia and televisions -- and the taxman taketh away. After an early fumble on this front, though, the beloved talk show host made she sure waved goodbye to her own tax money instead of putting the obligation on her fans.|
For most, tallying up income each tax season is relatively straightforward -- collecting W-2s and 1099s, itemizing assets and subtracting deductions. Windfalls from out-of-the-ordinary sources such as Oprah's largess, game-show prizes and even criminal activity can complicate how federal and state tax collectors eyeball your cash flow.An annual tradition for Oprah's audiences has been her annual "Favorite Things" episodes, where a throng of audience members, so excited they're nearly speaking in tongues, collect a variety of (likely donated) luxury items, electronics and big-ticket items. Digital cameras, large-screen TVs, Blu-ray players and even cars have been given out en masse. Back in 2004, Oprah became embroiled in what has been dubbed "Cargate" after giving away a minifleet of brand-new Pontiacs. Thrilled as audience members may have been at the time, the roughly $7,000 in gift taxes they were soon hit with must have been a hardship and unhappy surprise. Oprah has changed her game plan, basically adjusting her prize packages so she and her company absorb the tax hit. Otherwise, a recent trip to Australia with about 300 fans would have cost them plenty. "Most of
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