How much taxes would need to be paid on a prize item worth more than 2 mil USD?

November 11, 2009 by admin · 2 Comments
Filed under: United States 
home furnishing
manof2boys asked:


I am entering a contest where the grand prize is a fully furnished home and vehicle worth more than 2 million U.S. dollars. I am wondering what the taxes would be on such a prize and if that would be per year or how the tax plays a role in a home prize. Is it even feasible for middle class or lower class people to enter in such a contest? My family is considered to be in the Middle Middle class range. Thanks for your help!=)

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2 Responses to “How much taxes would need to be paid on a prize item worth more than 2 mil USD?”
  1. bostonianinmo says:
    November 12, 2009 at 2:23 am

    The max Federal tax rate is 35% so the total income tax would be just a shade under $700,000. You would also have to pay the annual property taxes on the property. Property taxes vary widely. In CA it would start at $20,000 per year. In parts of TX or FL it would be as high as $100,000 per year. In Westchester County, NY it could be as high as $160,000 per year.

    Most middle class folks could not afford the home and would have to sell it just to pay the income taxes on it. bostonianinmo

  2. Robin M says:
    November 14, 2009 at 7:50 am

    I know someone who won a lottery prize in a different state She spent the money not realizing she would owe fed taxes on it she didn’t include it on her income taxes but the IRS got a form from the state she won in she ended up having to pay the taxes plus interest and penalties for the 2 years that the IRS did not catch it, it was a mess the garnished her pay and everything She goes to a Tax Attorney every year and is still digging herself out of the mess it created. She lost more eventually than she won. Robin M

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