Pa. man wins $1M Picasso with $138 raffle ticket

WOW! Good news for this guy right?

A man looking for art for his new home has won a $1 million Picasso painting with a $138 raffle ticket.
Jeffrey Gonano told the Pittsburgh Tribune-Review he's not sure he'll ever hang the masterpiece in his home in Wexford, in western Pennsylvania, given its value.

The 25-year-old Gonano, who works for his family's fire sprinkler business, learned Wednesday that his ticket had won the Paris raffle. Organizers say nearly 50,000 tickets were sold worldwide, for 100 euros apiece, to benefit a Lebanese charity.

The 1914 work, "Man in the Opera Hat," dates from Spanish master Pablo Picasso's cubist period. Picasso died in 1973.

Source

Due to a bad case of insomnia, I was just watching the Pittsburgh news and they said that the TAXES that this gentleman will have to pay will be OVER $300,000!!!!! Now the guy isn't so sure what to do......

So much for winning a piece of art aye?

EDIT: Just found a little more on the tax issue. Doesn't sound like the guy will take a beating after all....

McCrory said it's possible Gonano could have the piece appraised at a lower value than $1 million, thus decreasing the taxes owed. However, the IRS has appraisers who could get involved, he said.

“'Value' can mean different things to different people,” McCrory said.

Jennifer Jenkins, IRS spokeswoman, declined to comment.

If Gonano simply donated the painting to a museum, he would not have to pay anything, McCrory said.

“He would have the value of the painting as income and an equivalent amount as a charitable deduction. Zero tax effect,” he said.

However, McCrory said Gonano would be better off selling.

Source

I don't understand why he would have to pay any taxes until he sold the painting. I assume it is being treated as a type of capital gains tax, where the difference between the cost of his ticket and the value of the painting is the amount gained. He technically shouldn't have to pay any taxes until he sells the painting, then he would have to pay tax on the money he received for the painting.

If this man is taxed for something he won overseas then why aren't corporations taxed on money they make overseas?

ChaoticOrder
I don't understand why he would have to pay any taxes until he sold the painting. I assume it is being treated as a type of capital gains tax, where the difference between the cost of his ticket and the value of the painting is the amount gained. He technically shouldn't have to pay any taxes until he sells the painting, then he would have to pay tax on the money he received for the painting.

It looks like they are taxing him the same way they tax people who win items on game shows.

reply to post by seeker1963


Oh brother... Poor guy... People never think of that part.

It was a dark side seen growing up in Southern California. All KINDS of new cars, vacation trips and more in the classifieds. Every day, every week, every year. Some for absurd prices ....near tax liability prices.

..about what those scores of idiots playing the game shows learned they owed after the cameras went off and the IRS Agent assigned for the purpose came around to remind them, paperwork can be filed right there. Just like a casino with $1 over the limit to claim.

Winning sucks sometimes, huh? (Maybe he can re-sell to beat the taxman like the game show people try to do)

reply to post by buster2010


So if some one won a car on a game show they would immediately have to pay a large sum of money in order to keep the car? How can they expect anyone to be able to afford such a payment? If that's true then I can bet 90% of people who win anything other than cash must convert their winnings into cash in order to pay the taxes. But some how I doubt that's how it works.

reply to post by ChaoticOrder


Chaotic.. That's precisely what DOES happen, every day.

You may want to decline some prizes

Contestants should be prepared to pay taxes on every prize, even coupons and vouchers. If you win a year of housecleaning services or six personal training sessions, expect to be taxed.

When he was a broke college student living in California in 1987, Thom Singer, now 45, won $20,000 in cash along with a trip for two to Brazil, a sailboat and a stereo on "The $25,000 Pyramid." He also scored several "parting gifts."

"They taxed everything I won, including all the parting gifts, like a really ugly watch, coupons for a year's worth of cough syrup, a case of Otter Pops, etc.," Singer says. "I should have declined all the parting gifts, as most were dumb and went unused."

Source: Win a game show? That'll cost you

I believe there is even a special % established depending on the nature on win it's about?

reply to post by Wrabbit2000


Wow that's unbelievable. Especially at 30%, that's just criminal. So basically, unless the winner was already some what wealthy they wouldn't be able to pay the taxes on non-cash winnings without first converting their winnings into cash? It's just never enough with the government is it. It's amazing that they can find a way to spend all that money and then still require so much deficit spending. It's beyond my imagination how they manage such an amazing feat of incompetence.

reply to post by Wrabbit2000


Basically IF you really wanted the painting, say for instance a family heirloom to pass down, the tax man will make damn sure you'll have to sell it for the cash amount to get ahead. IE if you couldn't afford the painting in the first place, they make sure you can't have it. Albeit to sell it, there would still be a nice cash gain depending on the amount the "valuable" was worth..

Kinda sucks that your average serf doesn't have the ability to actually win a historic article to pass on to their family. Guess that is a privilege reserved for the Lords and Ladies.....

Why one Earth don't raffles and game shows include the tax in the prizes, that way you actually get to keep what you've just "won".
Sounds like the real winner is always the IRS.

As for keeping a Picasso in your house when the whole world knows you won it?
INvitation for a home invasion imo.

reply to post by ChaoticOrder


It is utterly amazing, isn't it? It was one of my first big shocks..really shocks to my little core...as a kid. I think I'd asked my mom way back..why the local classifieds always had new cars cheaper than the big lots and the same ones... Well, that's when I believe I got my first lesson in Show Business vs. Reality and how the smiles were real on the show .....because they didn't know what was coming next, yet.

It really should be a tax included or something like that... Prizes won, you'd think, WOULD mean that prize is really yours. A Picasso or a finger paiting..whatever.. eh?

The lottery is what gets me most. Here, with the painting? It's someone else's value and property, start to finish. The taxman at least isn't taxing HIS OWN money before you get your cut. Lotteries literally DO tax Government money before generously allowing a fraction of what the "win" was.

outrageous....

IRS better hope he doesnt sell that painting a buy a plane instead

That really sucks he cant afford a painting he won.

reply to post by seeker1963


I hope he challenges this in court. A painting is not like a washing machine, with a set value. It's value should be, for the tax purposes in this particular case, either $138 - the cost of his raffle ticket - or the accumulated value of the wood, canvas, and oil which make up the physical object. Putting a value on it using someone else's estimate is using a purely subjective value-judgement as the basis for tax purposes. Get a good lawyer on the case - working pro bono of course or else they'd eat up the value of the wood, canvas, and oil fairly quickly.

reply to post by Aleister


I agree with the arbitrary values..but that defines the entire tax structure outside such black and white things as income.

They claim, for instance, my house is worth just over $90,000. My foot! My neighbors sold for under $50,000 this year. One up the way, under $50,000 last year and a commercial duplex right next to me sold for $90,000 within the same general time frame.

Calling mine worth MORE than actual cash paid market value to a commercial property next to me and almost twice that of other homes on the street is so arbitrary I could scream. It's what bumped my property taxes up though ..and I could fight city hall, but then they'd probably call it $100k next year and the fight would start all over.

Arbitrary valuation to insurance numbers seems just the way the system works.

reply to post by ChaoticOrder


The reason for this specific tax treatment is because it is a "winning", which would fall under "gambling income". According to tax laws, the market value of an item won (or cash amount) must be reported on one's tax return under "other income".

www.irs.gov...

In fact, the only time capital gains would be used for the painting would be in the case of acquisition and then sale with the tax amount being the net proceeds from the sale. Even if he had inherited the painting, he would possibly have to still pay some tax on the value of the property.