What is the worst prize someone won on TV?A car.In 2004, Oprah Winfrey Show[1] gave away 276 donated, new cars to prescreened 276 audience members with a need of a car. The car values totaled about USD $7.7[2] million ($28,000+ each).SOURCE: Oprah's Famous Car Giveaway: 6 Things You Probably Didn't KnowThe giveaway was considered a prize since Oprah did not file or pay excess gift tax return.Most expenses were paid by the show including registration and taxes but not gift taxes some audience members would have incurred.“While the show did offer a cash prize for those who didn’t want [the car] or couldn’t pay the gift tax, some audience members complained to the press, which devastated the producers and news outlets reported she didn't pay any of the additional costs of the prize giveaway.Everybody did get a car.[3] But not everyone kept it. It was a tough reality for many in the audience that day that they were responsible for the estimated $6,000-$7,000 federal, and state taxesOne couple sold both cars to pay taxes and payoff bills.Others saw it as opportunity to purchase a $28,000+ car for $6,000Some audience members were unhappy the cars were donated from General Motors not Oprah. However, her show paid for registration and sales tax (~$1,800)[4]Others were upset the gift was actually a taxable prize and they didn't understand their options on the documents signedPay taxes and keep the carKeep, sell, and pay taxesRefuse the carTake cash instead; pay taxes"You get a car! You get a car!" episodehttp://www.oprah.com/oprahshow/o...http://www.oprah.com/oprahshow/o...Oprah relieves car giveaway episodeYouTubeDuring her final season, Oprah gave away a 2012 Volkswagen Beetle donated by the company and paid all costs: registration, sales tax, and gift tax. Receipents had to wait a year since it was still being assembled but it was a PR hit for VW and a comeback for Oprah's previous giveaway confusion.[5]Related:SOURCE: Gift Tax: Do I Have to Pay Tax When Someone Gives Me Money?Prizes are taxable. Almost all prizes are taxable income. You report them on your income tax return as other income. This is the case whether your prize is cash, merchandise, or free services.The prize may be reported to the IRS. Prizes valued at $600 or more must be reported to the IRS. However, prize values below this reporting threshold may also be reported at the discretion of the sponsor of the prize. As the winner, you should look to receive the proper Form 1099-MISC.Gifts and prizes have different tax rules. A different part of the tax code applies to gifts. In short, gifts received from someone that are less than the annual gift threshold ($15,000 in 2018) are not deemed prizes.https://willispc.com/its-your-an...Footnotes[1] The Oprah Winfrey Show - Wikipedia[2] The Oprah Winfrey Show - Wikipedia[3] A Look Back At Oprah's Ultimate Car Giveaway[4] 20 Things That Really Happened When Oprah Gave Away "Free" Cars[5] Image on hotcarsimages.com