A user might win an Xbox Game Pass Ultimate lifetime subscription in a contest that Microsoft launched in 2021. The winner was selected after the event was organized by the corporation, but the contestant… declines to take the award.
The American business urged interested parties to participate in a straightforward game in which they could spend 200 Microsoft points to enter a lottery by promoting “Xbox Game Pass Ultimate Access ‘For Life'”. The chosen lucky person will receive a 40-year Xbox Game Pass subscription.
Despite winning the prize, one player canceled his Xbox Game Pass for life since it would have an impact on his tax return:
I have read that if I claim the award, $7,300 will be added to my 2023 tax as taxable income. Under U.S. tax law, this will likely increase my 2023 federal tax by $1,752 (or 24% of winnings). Also, I would have added taxes on state income, but we won’t worry about that right now. The “lifetime” portion of the award is limited to a maximum of 40 years, so the $7,300 is its monetary value, which I must report to the IRS. The prize is not transferable nor can I ask for its monetary value.
The winner is in a difficult position because, as the contestant himself mentioned, he would prefer to obtain a 10-year Xbox Game Pass that wouldn’t be as expensive for him than a “lifetime” one that lasts for 40 years and has an impact on his tax situation.
However, it should be highlighted that the competition’s rules made clear that the tax-related facts were important.
Source: Purexbox