I won a Toyota Prius in a charity raffle. Do I have to pay taxes on it? What if I sell it right away? --P.A., Berlin, Md.
It may seem like a dirty trick, but you will have to pay income taxes on the fair market value of the car minus the cost of the raffle ticket—whether you sell the car or not. The organization conducting the raffle must submit Form W-2G to the IRS with the value of the car, which you report as “other income” on line 21 of your Form 1040.
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