Apple Launches '10 Billion App Countdown' Contest

[0815]

And shamefully, here in the U.S. one would have to declare that $10k gift card as income and pay taxes on it.

Send me cash please.

This is why I won't download any apps until the milestone is hit. I would be really pissed if I win that price and have to pay huge tax on it, only to get some value out of it over many years.

Anyway: Congratulations Apple - but the prize does not look like a sweet deal

 

[BJB Productions]

Alright, I know this was discussed a ton last time this happened, but does entering 25 times a day increase the chance of winning? Or is it not even worth it? Would you have to enter right as the 10th billionth app was downloaded? I'm confused.

EDIT:

For purposes of the Promotion, the downloading of the 10 billionth app is considered to be either the downloading of the 10 billionth app from the App Store or the receipt of the non-purchase entry after the download of the 9,999,999,999th app, whichever comes first.

Ok...makes sense.

 

[spazzcat]

This is why I won't download any apps until the milestone is hit. I would be really pissed if I win that price and have to pay huge tax on it, only to get some value out of it over many years.

Anyway: Congratulations Apple - but the prize does not look like a sweet deal

If I won, I would just sell it to make a few bucks and cover the taxes....

 

[Monty88]

Just maybe...

Does anyone think the counter listed on Apple's website is in real-time?

 

[zin]

I hope people realize that no purchase is actually necessary for this.

Does anyone think the counter listed on Apple's website is in real-time?

I wouldn't have thought so.

 

[lewis82]

 

[0815]

If I won, I would just sell it to make a few bucks and cover the taxes....

Good luck finding a buyer ... don't think there are many people spending a many thousand dollars (in short time) on iTunes - and that type of buyer you would need to find, otherwise the savings are not worth it (since you pay up front). You have to charge an amount that is way more than the tax due to make it even worth it. If you sell it for less than the face value - could you claim than some 'loss' on the tax return? (that might make it worth it)

 

[3282868]

I'm going to keep a watch on this, if it's anything like the ITMS contest, the number shot up the closer it got to the winning mark.

Also, does this include the Mac App Store or just the iOS App Store (yeah yeah I should read it, but too slammed at work)? Thanks!

 

[pr5owner]

$10,000?!?!?!?!?

and all you could do for a Christmas sale was a lousy $3 off a an ipod? hahahaha

this is for comparison, other products were marked with reasonable discounts

 

[pmjoe]

Can you buy hardware with an iTunes gift card? I've never spent $1 in the iTunes Store, let alone $10,000. I might come up with a few apps I might buy, but never anywhere near $10,000.

As some others have mentioned, I'd hate to get stuck paying taxes on this "prize", as I don't see much value in it.

 

[nylonsteel]

wow - 10B

 

[Yamcha]

Holy crap, almost 10 Billion already!! anyway I'm not gonna bother being the 10 billionth downloader, I never win

 

[Fugabutacus]

$10,000 would be amazing. And I could really use it considering how much I spend on iTunes that I can't afford! Too bad I'm unlikely to win.

Any idea if the counter on Apple's website gives at least a vague idea of how close they are?

 

[blizaine]

at it's current rate, I calculate that it will take about 168 hrs to get to 10B, from right now.

But I'm sure the rate will increase it is draws closer.

 

[JAT]

About tax

Tax issue:

Noncash Prizes: For noncash prizes, the winner must pay the organization 25% of the fair market value of the prize minus the amount of the wager.
Example 3: Jason purchased a $1 ticket for a raffle conducted by X, an exempt organization. On October 31, 2004, the drawing was held and Jason won a car worth $10,000 (fair market value). Because the prize exceeds $5,000 and the fair market value of the car is $10,000, the tax on the fair market value of the prize is $2,499.75 [($10,000 minus $1 ticket cost) x 25%)]. Jason must pay $2,499.75 to X to remit to the IRS on his (Jason’s) behalf. X would indicate the fair market value of the prize ($10,000) in box 1 and the amount of the withholding tax paid ($2,499.75) in box 2 on Form W-2G.

Organization Pays Withholding Tax: If the organization, as part of the prize, pays the taxes required to be withheld, it must pay tax not only on the fair market value of the prize less the wager, but also on the taxes it pays on behalf of the winner. This results in a grossed up prize requiring the use of an algebraic formula. Under this formula, the organization must pay withholding tax of 33.33% of the prize’s fair market value. The organization reports the grossed up amount of the prize (fair market value of prize plus amount of taxes paid on behalf of winner) in box 1 of Form W-2G, and the withholding tax in box 2 of Form W-2G.
Example 4: If in Example 3, X pays the withholding tax on Jason’s behalf, the withholding tax is $3,332.67 [($10,000 fair market value of prize minus $1 ticket cost) x 33.33%]. X must report $13,333 as the gross winnings in box 1 of Form W-2G, and $3,334.67 withholding tax in box 2.

No idea how Apple does their contests. Also not exactly sure how it works with a specific gift card like this. If it's considered cash, then Apple is actually supposed to do the withholding before awarding the prize. Perhaps the $10k is actually $6666 when it arrives.

 

[Dr McKay]

You... Have to pay taxes on a prize?

That is quite possibly the most retarded tax I have ever heard of, and I'm from the UK where we have to have a license to watch TV.

What if someone gets lucky and wins an amazing car, but is barely getting by, and can't afford the tax, will that cause them to spiral into debt?

Especially in this case I'm assuming Apple will put the 10k directly into your account, and not post you a voucher you can sell.

 

[JAT]

Yep, that's pretty much it. Some contests have "gross up" behavior, where they pay the tax OVER your winning amount. Others are required to pay the tax up front, as the quote dictates. If I was on the verge of bankruptcy, I'd sell the $40K car, anyway. Use the money to pay tax, then still have $25K in cash, buy a $5K car, etc, etc.

 

[pmjoe]

You... Have to pay taxes on a prize?

That is quite possibly the most retarded tax I have ever heard of, and I'm from the UK where we have to have a license to watch TV.

In the US, our national taxes are based on income (a prize is income), but we pay no national sales tax or VAT. I don't see anything "retarded" about it.

What if someone gets lucky and wins an amazing car, but is barely getting by, and can't afford the tax, will that cause them to spiral into debt?

Especially in this case I'm assuming Apple will put the 10k directly into your account, and not post you a voucher you can sell.

Well, that's exactly why this discussion came up. Most prizes are things you can easily sell if you don't want them. If you can't afford to pay the tax on something you win, you usually can just sell it.

 

[dacapo]

I KNOW, right?
Come on, Apple, pony up!

They've got 5 times that in cash sitting around, literally.

 

[Kenso]

If I won, I would just sell it to make a few bucks and cover the taxes....

But they may also credit your iTunes account and therefore, you wouldn't be able to sell it. I would prefer an Apple Store gift card, would sell it at a price that would cover the tax and afford a magical and revolutionary product at an unbelievable price

 

[tigress666]

But they may also credit your iTunes account and therefore, you wouldn't be able to sell it. I would prefer an Apple Store gift card, would sell it at a price that would cover the tax and afford a magical and revolutionary product at an unbelievable price

The problem is, even if you get a gift card, who is going to buy it? Who needs that much in itunes?

If the tax is 2k, you may be able to sell it for that (I've always been told tax on a prize ends up equalling about half the prize value which I think even finding a buyer who thinks they'll spend 5k in itunes would be hard). Certainly even if the tax is around 2k like some one quoted on this thread, you are probably only going to be able to sell it for enough to cover your tax. Who really gets the benefit is the person who bought it from you.

 

[Dr McKay]

In the US, our national taxes are based on income (a prize is income), but we pay no national sales tax or VAT. I don't see anything "retarded" about it.

Well, that's exactly why this discussion came up. Most prizes are things you can easily sell if you don't want them. If you can't afford to pay the tax on something you win, you usually can just sell it.

I don't see a prize as income, income is something you go out and earn, and the tax for this is reflected on how much you earn and your financial standing, winning a prize is pure luck, and having to pay a potentially crippling tax on it because you are not in good enough standing to pay for it is ridiculous.

The prize could be something you'd never be able to afford with your current standing, the only tax here I can think of that is that ridiculous is inheritance tax.

 

[Sodner]

I'd take a $5,000 APPLE STORE card over a $10,000 iTunes card.

It be cool if you got an acutal plasic iTunes card with $10,000 in the corner. EBAY!

 

[tigress666]

I don't see a prize as income, income is something you go out and earn, and the tax for this is reflected on how much you earn and your financial standing, winning a prize is pure luck, and having to pay a potentially crippling tax on it because you are not in good enough standing to pay for it is ridiculous.

The prize could be something you'd never be able to afford with your current standing, the only tax here I can think of that is that ridiculous is inheritance tax.

Well, I think the idea is that it was free "money" that you got and therefore you should be happy to get free money and the government wants some. You didn't earn it so it's not like the government is taking earned money from you.

Anyways, I think that is the idea of taxing prizes. Also, I was always told it is a ridiculous amount on top of it (like half).

That being said, the government needs to require companies to take out the money from the prize (if it is a tangible thing require they offer a cash equivelant - the tax or even if it is a gift card take out the tax from the amount of the gift card). Because otherwise some one could get awarded something they can't afford the tax on and it's not always so easy to sell the prize to get the tax (a car yes, a gift card like this? Who needs that much itunes enough to pay for that all upfront?).

 

[morespce54]

Confused...
At first I though, "Wow, 10th billions downloads form the (Mac) App Store? Since last week?"

Now I know... there's the App store and there's The App Store...

Good thing that they're looking to patent the name(s)...