Thank you for that clarification. So all those dollars people earn on game shows, and all the cars, trips, furniture, etc. that they win...those are “prizes” and the winners pay the tax, right? Just like winning the lottery. That is what I always thought. I doubt the game shows consider them “gifts.” I would be surprised if Oprah pays the taxes for 300 for a flight and stay in Australia. But who knows, she might consider it a worthy cause for her own selfish PR...when so many are out of work and could use that money for food.
Precisely. There was some scandal a few years ago with those Oscar (and other awards shows) gift baskets to the stars. As it turns out, those baskets - some of which were in excess of #100K in value - weren't being reported or claimed by anyone. The IRS got wind of it, and put the kibosh on it. Now, if a star accepts a gift basket, they'll also receive a 1099 for the market-value of the "prize", and thus be liable for the tax on that income.