Free Donuts, Plus $237 in Taxes


A Texas man says there was a significant hole in the free prize he won last year at an Astros game. On fan appreciation day, Bob Choate won 315 coupons from a local donut shop. Choate, a donut fan, as well as a baseball fan, was thrilled. Until, says the Houston Chronicle, he got a letter informing him he owed the IRS $237 in taxes for his “free prize.” According to the 1099 form Choate received, his 315 free-coffee-plus-a-donut vouchers were worth $927.61, well over the $600 threshold the IRS sets before requiring a person to declare something as a gift or prize. Luckily, the story has a happy ending: the donut shop owner agreed to cut Choate a check for his tax burden.

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