WebTaxMan. Tax Accountant replied 8 years ago.
This sounds like a prize or award and the IRS would treat it as part of your gross income. It is taxed at whatever your marginal tax rate is. I am just going to guess/make up that it is around 22%, so 11,000 * .22 = $2,420 in additional tax.
You just have to plug in what your actual marginal tax rate was from last year, assuming all else remained the same, and use that rate to figure the tax.
You can read more by clicking here
This an article from Bankrate.com entitled Free Trips will Cost you Money. It does a good job of explaining how this trip is taxed, much better than any IRS publication.
Also try their marginal tax rate calculators to find what yours is based on last years numbers, or this years numbers.
Should you require further clarification, please never hesitate to ask. It would be my pleasure to clarify the answer to your question. My goal is your 100% satisfaction with all
questions I answer.
If you feel I have given a complete answer, and you are satisfied with my answer, please press the GREEN ACCEPT button. Feedback and bonuses are always greatly appreciated!
Just Answer! acts as a venue for entertainment purposes. Responses and comments on Just Answer! are for general information and are not intended to substitute for informed professional advice (such as medical, legal, investment, accounting, or tax) and do not establish a professional-client relationship. Just Answer! is not intended or designed to address EMERGENCY QUESTIONS which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service. Any information given by me is not offered as, nor is it intended to be, considered legal advice in any way, shape, or form, and shall be treated as procedural information only. Per Cal. Bus. and Prof. Code § 6450 et. al. Paralegals or Legal Assistants cannot give legal advice. The information herein is not exhaustive. You should always seek legal counsel from a licensed attorney in your state.