…tax bill!

Oprah got a lot of great press last week when she gave a “free” new Pontiac car to every member of studio audience. But as the Wall Street Journal’s Taste page notes, it quickly turned into a tax nightmare. According to one expert’s calculation, “someone in the 15% federal bracket (making, say, $28,000 as an individual, or $56,000 if filing jointly) and a 5% state bracket who gets a $30,000 car (the figure for the G6 is about $28,500) will owe an extra $6,000 in taxes. For a single earner in the 33% bracket kicking in at $143,500, the car adds $12,000 in tax.”

Bloggers, natch, were on the case last week. The WSJ quotes from TaxProf Blog, which has more here and here.

According to this report, some audience members knew about the taxes when they accepted the cars. But this report says some recipients don’t remember being told and others are now contemplating selling their cars to avoid the taxes.

Oprah might want to refer her audience to Dr. Phil for some post-tax traumatic stress counseling.

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