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Tax curves ahead for lottery winner

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in Small Business Tax

Q. A family member won an SUV in a lottery. If we sell it right away, do we owe any tax? Anonymous

A. Yes. Even if you sell the SUV immediately after receiving it, you’re still taxed on your lottery winnings. The taxable amount is the value of the vehicle on the day it’s received. Furthermore, if you sell the vehicle soon after for a higher value, you will owe tax on any short-term gain.

Tip: In addition to federal income taxes, you will likely face state income tax complications.

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