Buying a new boat certificate, any body done it

[hammer84]

Last tourny I was at the winner received a 33k certificate for a new stratos.  I was standing near him when some one inquired about buying the "boat".  Long story short the guy bought the "certificate" for 22k.

Any one done this ??  Any big pitfalls to lookout for ??

I have found two recent winners that have nitro z-6 certificates for sale.  thanks

[stew6371]

I wouldnt think there would be any problems. Here is a link to a guy in Okc, Ok that is selling the boat he won. http://oklahomacity.craigslist.org/boa/861769506.html Pretty good deal.

[DaveHawkins]

How would the sales tax work on something like this?  Who would be responsible for it....or maybe both?

[hammer84]

How would the sales tax work on something like this? Who would be responsible for it....or maybe both?

I talk to the state about that.  Basically both.  Winner pay tax on full amount and them the buyer pays on the amount of purchase.

[Long Mike]

The winner of the boat will receive a 1099 form for the amount of $33K, which he must include as income on his Tax Return.  When the winner of the boat sells the boat he should legally add sales taxes to the sales amount.  That seldom, if ever, happens and is pretty much ignored by the local and Federal tax authorities.

[hammer84]

I wouldnt think there would be any problems. Here is a link to a guy in Okc, Ok that is selling the boat he won. http://oklahomacity.craigslist.org/boa/861769506.html Pretty good deal.

that link is bad, is this the one

http://oklahomacity.craigslist.org/boa/878590366.html

[Pencil Pusher]

The winner of the boat will receive a 1099 for the 33K, which is included in his income and he pays income tax on that. That could cost him around 10K. When he sells the certificate, he cannot legally collect sales tax nor does he have the responsibility to do so because he doesn't have a sales tax license from the state. When the certificate buyer picks up his boat at an authorized dealer, the dealer will either collect sales tax on the boat (for 33K sales price, the stated value of the certificate) or the buyer will have to pay when he registers the boat (depends on how the state collects the tax).

There should be no sales tax on the certificate, it is no different than buying a gift certicate, no tax until the certificate is used to make a purchase. If the winner uses the certificate and takes possesion of the boat, then both will pay sales tax as stated in the post above.

[Long Mike]

Pencil Pusher, thanks for straightening me out.  My wife is a CPA who was watching TV when I asked her the question.  It's obvious that I received only a half-hearted response.