I think every one of these contests has ended up being a big name artist. It does seem odd. What if the actual 10 billionth song was "I F***** Your Wife" by Anal C**t (yes, it's a real song and band, go look it up)? I don't think Apple would be choosing that as the winner.
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Apple Announces Winner of 10 Billion Song Contest
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I think every one of these contests has ended up being a big name artist. It does seem odd. What if the actual 10 billionth song was "I F***** Your Wife" by Anal C**t (yes, it's a real song and band, go look it up)? I don't think Apple would be choosing that as the winner.
On top of that, gift cards tend to have a certain period of time, from activation, that it must be used by without penalty/expiration. Maybe that is not the case for this, but if it is, that guy is gonna be busy downloading stuff for the next year.
It says no purchase necessary because I believe there is a law against them forcing people to buy something to enter the contest. It's the same whenever Pepsi or Coke have of of their many contests where you look under the cap for a number. Usually you can go to a website and generate a code or something. Very few people go through the trouble of doing this anway and most contestants are those that have paid for a product.
Anyway, I like the title of the song. Appropriate for the winner.
Even if this "income" bumps him into a higher tax bracket, the higher tax rate affects only the income in that bracket. In other words, you can't ever take home less by earning more. However, yeah, since this isn't really useful "income" (since most people would never spend anywhere close to this amount on iTunes), it would still suck to have to pay tax on it.
$10,000 itunes gift card? What in the hell is he going to do with that? Thats like 3 lifetimes worth of music. I think the idea was that they basically just gave him free downloads for life, I doubt he will ever spend it all. Now if it expires then that would be kind of funny.
Maybe you were joking, but you do realize that would destroy the iTunes store profitability, right? It would be like a buy-10E9-get-10E9-free promotion... I'm not sure how the fees work, but I would imagine that Apple wouldn't even be in the black on such a deal...
I do agree that the $10K gift card is lame... it's like giving someone a $10K card that they can only use to buy paperclips... good luck using that one up any time soon. At the very least (and this is still being ultra cheap, IMO), they should give the winner an iPad... that's free advertising (well, not "free" I guess).
All of that said, I suppose the counter-arguments make some sense too, though... they didn't really have to do anything for 10E9... but, what this is really all about is advertising, not philanthropy.
Out of morbid curiosity, I'd really like to know what the tax consequences are. People have posted multiple thoughts on this already, but I see nothing conclusive.
I'm not sure if the terms of the prize matter or not? e.g., most gift cards eventually expire and that has accounting consequences. Not sure if this sort of thing has a tax effect or not on the winner though.
I really see the "prize" as just a 10K credit at the iTunes store. The prize has no or minimal cash value. You can't sell it. This would seem to make a difference. If you win a car, you can sell it, it is something tangible that has a real cash value.
The most I could see is that perhaps as you use credit at the store, you are taxed on what you cashed in. But even then, you can't re-sell stuff you buy from the iTunes store so it still has no value. Hey, isn't that 100% instant depreciation? Think about it, everything you buy from the iTunes store is worthless the minute you buy it.
I'm not sure if the terms of the prize matter or not? e.g., most gift cards eventually expire and that has accounting consequences. Not sure if this sort of thing has a tax effect or not on the winner though.
I really see the "prize" as just a 10K credit at the iTunes store. The prize has no or minimal cash value. You can't sell it. This would seem to make a difference. If you win a car, you can sell it, it is something tangible that has a real cash value.
The most I could see is that perhaps as you use credit at the store, you are taxed on what you cashed in. But even then, you can't re-sell stuff you buy from the iTunes store so it still has no value. Hey, isn't that 100% instant depreciation? Think about it, everything you buy from the iTunes store is worthless the minute you buy it.
Big name = more popular = more downloads = higher likelihood of being the winning song. Pretty straightforward.
congrats to a lucky dude!
i had a go and bought some songs, but alas, no good this time. i'll try again on the next 10 billionth... gotta keep dreaming about the mac pro i could buy with that money
EDIT: gift card for iTunes? man, thats lame.
i had a go and bought some songs, but alas, no good this time. i'll try again on the next 10 billionth... gotta keep dreaming about the mac pro i could buy with that money
EDIT: gift card for iTunes? man, thats lame.
Contest winnings are taxed like ordinary income. Apple will send the winner a 1099 form.
You can also see the contest rules state that taxes are the responsibility of the winner.
Hmm, interesting. Since I'm not aware of how one could cash a portion of the gift card (other than outright selling it), as per your comment the winner will actually have to spend his own cash to pay the tax for his prize. That's harsh.
I wasn't aware that taxation is such an issue in the US when it comes to prize money. Do you also pay taxes when you win in the lottery or at game shows like Jeopardy?
Was That REALLY The 10 Billionth Song? Really?
You know, I really wondered if they pick and choose songs downloaded around the 10th billionth mark and not exactly the 10 billionth one itself just to find the most politically correct one for press reasons. I highly doubt they'd post a rap song like "Whoop That Trick" or something to go down in the books as the 10th billionth download - I'm convinced this is the case. You know an app like "iWobbly Boobs" would never have been allowed to mark a download milestone in the app contest a while back. "Guess Things Happen That Way" by Johnny Cash seems far to cliche of a song title to really be the winner in my books. Just my theory.
And yes, the tax part of the prize sucks - I wonder if he'd actually have to pay taxes on such a prize. That would be awful.
You know, I really wondered if they pick and choose songs downloaded around the 10th billionth mark and not exactly the 10 billionth one itself just to find the most politically correct one for press reasons. I highly doubt they'd post a rap song like "Whoop That Trick" or something to go down in the books as the 10th billionth download - I'm convinced this is the case. You know an app like "iWobbly Boobs" would never have been allowed to mark a download milestone in the app contest a while back. "Guess Things Happen That Way" by Johnny Cash seems far to cliche of a song title to really be the winner in my books. Just my theory.
And yes, the tax part of the prize sucks - I wonder if he'd actually have to pay taxes on such a prize. That would be awful.
yes and yes. Richard Hatch, the winner of the first US version of Survivor, went to prison when he didn't pay taxes on his $1 million prize. His defense was that he thought the TV network paid the taxes for him. The IRS wasn't amused. For the lottery, if you win over a certain amount you have to fill out tax forms before you get your winnings. Otherwise you are supposed to claim the winnings on your taxes. Same thing if you win in a casino (although the amount triggering the tax form is much higher). But in both cases since the payout is cash, good luck to the IRS in trying to find you if you didn't have to fill out a tax form on the spot.
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