$75,000 rule

This is where all of the games are discussed.

Moderators: alietr, trainman, econgator, dhkendall

User avatar
triviawayne
Hoping I don’t drown in this contestant pool
Posts: 1520
Joined: Tue Feb 17, 2015 9:50 pm

Re: $75,000 rule

Post by triviawayne » Mon Nov 02, 2015 1:46 pm

I had a post earlier and had to delete it...I really bungled it trying to work on a few things at once and respond to this.

You are allowed to transfer only certain types of prizes to charity without claiming them as income.

First, you cannot have actively sought the prize by entering a contest or raffle. (of course the contestant actively entered the contest)

Second, the prize must be awarded based on your "charitable, artistic, scientific, and like achievements." (quite an achievement to rack up that much on Jeopardy)

Third, the prize must be transferred directly to the charitable organization without you taking possession of the prize.

If you are given the prize as a surprise, you are allowed to give it back without penalty. If you go this route, neither you nor the organization giving the prize can take a charitable deduction for the donation.

Summary: all three of the above must be met to not claim it at all. Since the contestant DID actively participate in a contest; AND the prize was awarded on merit; well that means the income gets reported and then the deduction is made, effectively wiping out that income. This does affect AGI and can have repercussions on other things...but probably won't for someone with that size income.
Total game show career losings = $171,522

User avatar
triviawayne
Hoping I don’t drown in this contestant pool
Posts: 1520
Joined: Tue Feb 17, 2015 9:50 pm

Re: $75,000 rule

Post by triviawayne » Mon Nov 02, 2015 1:48 pm

georgespelvin wrote:
Bamaman wrote:
Jeff-thecdboy wrote:It looks like they were indeed the only two that wound up having to donate some money to charity.
I thought they were the only ones, at least the only ones in the archive. It is nice some needy folks were helped, but it kind of sucked for them. Especially for Frank, who lost a quarter of what he won
Rex Kramer might be the best person to answer this because he used to be a practicing tax attorney, but was Frank allowed to take the $27,000 as a tax deduction for a charitable contribution? It might seem to be a no-brainer at first glance, but if Frank never had a chance by pre-existing rule to actually have the money, the IRS might have been able to argue that the money was Jeopardy's and that the charitable contribution was from Jeopardy, albeit instigated based on Frank's performance (somewhat analogous e.g., a person cannot deduct the amount of a match that another organization gives his charitable contribution as the match money never belonged to that person).

Edited to add: Another take on this question is whether Frank was required to report the $27,000 above the winnings limit as income because he never had a chance to get it. Obviously, if he counted it properly as income he could take the tax deduction.
With California law, some taxes are removed and he never received that money, but he still must report that income.
Total game show career losings = $171,522

JyV92
Jeopardy! UTOCer
Posts: 186
Joined: Sun Sep 11, 2011 8:06 pm

Re: $75,000 rule

Post by JyV92 » Tue Nov 10, 2015 6:22 pm

MDaunt wrote:I'm pretty sure there was no cap in 1995, when I was on. There's nothing in my contract.

PS. I don't recall Jerome Vered having to donate any of his winnings.
When Frank was on, there was a 75k cap.

When I was on, there was a $100k cap. We had to name a charity when we signed the contract on set if we went over 100k.
Given day 5 - (http://www.j-archive.com/showgame.php?game_id=802)
I thought about going for breaking Frank's 5-day record which was doable. Problem was - if I went for it and was wrong. I'd only have four days if 2nd place was right - and I wasn't sure I'd have been invited to the ToC or any subsequent tourneys. So I went for the max if I was wrong and she was right.

But there was a cap. (91-92 season).

User avatar
Robert K S
Jeopardy! Champion
Posts: 1613
Joined: Thu Jun 30, 2011 1:26 pm
Location: Cleveland, Ohio
Contact:

Re: $75,000 rule

Post by Robert K S » Thu May 02, 2019 1:31 pm

Does anyone know the exact date the cap was eliminated?

User avatar
MarkBarrett
Watches Jeopardy! Way Too Much
Posts: 9775
Joined: Fri Jul 01, 2011 10:37 am
Location: San Francisco

Re: $75,000 rule

Post by MarkBarrett » Thu May 02, 2019 1:34 pm

Robert K S wrote:
Thu May 02, 2019 1:31 pm
Does anyone know the exact date the cap was eliminated?
This has 2003. As for its reliability? Don't know. https://tvtropes.org/pmwiki/pmwiki.php/ ... inningsCap

User avatar
Robert K S
Jeopardy! Champion
Posts: 1613
Joined: Thu Jun 30, 2011 1:26 pm
Location: Cleveland, Ohio
Contact:

Re: $75,000 rule

Post by Robert K S » Thu May 02, 2019 1:35 pm

Yeah, other sources say 2001. It would have made sense to eliminate it with the show aired November 26, 2001, the date clue dollar values were doubled in Season 18. If any 2002 contestants could check their paperwork it would help resolve at least this discrepancy.

User avatar
MarkBarrett
Watches Jeopardy! Way Too Much
Posts: 9775
Joined: Fri Jul 01, 2011 10:37 am
Location: San Francisco

Re: $75,000 rule

Post by MarkBarrett » Thu May 02, 2019 1:45 pm

Robert K S wrote:
Thu May 02, 2019 1:35 pm
Yeah, other sources say 2001. It would have made sense to eliminate it with the show aired November 26, 2001, the date clue dollar values were doubled in Season 18. If any 2002 contestants could check their paperwork it would help resolve at least this discrepancy.
Ben Tritle and Kathy Cassity are two I'm sure I've seen post on Facebook recently. Jeremy Horowitz looks familiar, so he is probably still active to have trivia contacts known on this board? Ronnie would be a good option to message directly?

User avatar
Robert K S
Jeopardy! Champion
Posts: 1613
Joined: Thu Jun 30, 2011 1:26 pm
Location: Cleveland, Ohio
Contact:

Re: $75,000 rule

Post by Robert K S » Thu May 02, 2019 2:01 pm

Thanks, I sent a message to those players.

EDIT: Brian Weikle chimes in that he's pretty sure it was not in effect when he appeared in April 2003, but that he does not have paperwork handy to consult.

User avatar
gnash
Jeopardy! Champion
Posts: 1648
Joined: Fri Jul 01, 2011 9:24 am

Re: $75,000 rule

Post by gnash » Thu May 02, 2019 3:59 pm

georgespelvin wrote:
Mon Nov 02, 2015 8:50 am
Bamaman wrote:
Jeff-thecdboy wrote:It looks like they were indeed the only two that wound up having to donate some money to charity.
I thought they were the only ones, at least the only ones in the archive. It is nice some needy folks were helped, but it kind of sucked for them. Especially for Frank, who lost a quarter of what he won
Rex Kramer might be the best person to answer this because he used to be a practicing tax attorney, but was Frank allowed to take the $27,000 as a tax deduction for a charitable contribution? It might seem to be a no-brainer at first glance, but if Frank never had a chance by pre-existing rule to actually have the money, the IRS might have been able to argue that the money was Jeopardy's and that the charitable contribution was from Jeopardy, albeit instigated based on Frank's performance (somewhat analogous e.g., a person cannot deduct the amount of a match that another organization gives his charitable contribution as the match money never belonged to that person).

Edited to add: Another take on this question is whether Frank was required to report the $27,000 above the winnings limit as income because he never had a chance to get it. Obviously, if he counted it properly as income he could take the tax deduction.
If the law isn't completely wacko, then either he had to count it as income and could deduct the charity contribution, or didn't have to count it as income, but also couldn't deduct it. Everything else would be double counting.

That said, laws are not guaranteed not to be completely wacko.
Bamaman wrote:Seems like it would be a wash either way. If he claims the extra money as income and takes the deduction, his taxable income is $75,000 plus whatever he made as a policeman. If he doesn't claim the $27,000 (which would disqualify him from the deduction), his income from the show is still $75,000.
To a first approximation, it is a wash. But the AGI is different in the two cases. I don't know if that would have mattered back then, but today that can affect a taxpayer's eligibility for certain tax credits and liability for the ACA surtax.

User avatar
jlgarfield
Loyal Jeopardista
Posts: 144
Joined: Mon Apr 27, 2015 2:06 pm
Location: Seattle area

Re: $75,000 rule

Post by jlgarfield » Thu May 02, 2019 6:07 pm

kprather895 wrote:
Fri Oct 30, 2015 6:55 pm
Volante wrote: My first thought was Michael Larson. His Press Your Luck! run came just months before the current J! incarnation debuted, too.
At the time, IIRC, CBS had a $25,000 "soft cap" and no hard cap. This meant that you could win all you wanted, but you retired once you hit $25,000. Shortly after Larson's appearance, CBS's rule was changed to a $50,000 "soft cap" and a $75,000 "hard cap", so you retired at $50,000, and anything over $75,000 went to charity.

This was discussed on The $25,000 Pyramid as well because it came close to happening once or twice.
On that note, NBC never had such a winnings cap back in they day, but they did have an appearance limit.

Ivoryface86
Loyal Jeopardista
Posts: 155
Joined: Tue Aug 23, 2011 3:52 pm

Re: $75,000 rule

Post by Ivoryface86 » Thu May 02, 2019 7:08 pm

On the same note, ABC had no appearance limit on their shows but they had a "hard" winnings cap of $20,000 for most of their daytime shows, the exceptions were Family Feud, when families retire after exceeding the $25,000 limit(later $30,000, most likely after the 2000th episode celebration) and The Better Sex had winnings limits as well, but in an interesting way, teams could win up to exactly $30,000 before they were told to retire, again, neither of these shows, not even the $10,000/$20,000 Pyramid had appearance limits. Alex's other show, Double Dare didn't have appearance limits either but had players retire undefeated after reaching the $20,000 plateau but could win up to the "hard" winnings cap of $25,000. Yeah, there has been times that CBS forced players to give back some of their winnings when exceeding the $25,000 "hard" winnings limit IIRC.

Bob78164
Jeopardy! Champion
Posts: 344
Joined: Fri Jul 01, 2011 4:52 pm

Re: $75,000 rule

Post by Bob78164 » Thu May 02, 2019 7:14 pm

triviawayne wrote:
Mon Nov 02, 2015 1:46 pm
I had a post earlier and had to delete it...I really bungled it trying to work on a few things at once and respond to this.

You are allowed to transfer only certain types of prizes to charity without claiming them as income.

First, you cannot have actively sought the prize by entering a contest or raffle. (of course the contestant actively entered the contest)

Second, the prize must be awarded based on your "charitable, artistic, scientific, and like achievements." (quite an achievement to rack up that much on Jeopardy)

Third, the prize must be transferred directly to the charitable organization without you taking possession of the prize.

If you are given the prize as a surprise, you are allowed to give it back without penalty. If you go this route, neither you nor the organization giving the prize can take a charitable deduction for the donation.

Summary: all three of the above must be met to not claim it at all. Since the contestant DID actively participate in a contest; AND the prize was awarded on merit; well that means the income gets reported and then the deduction is made, effectively wiping out that income. This does affect AGI and can have repercussions on other things...but probably won't for someone with that size income.
I'm really not sure the money needed to be reported on his tax return. Under the rules in effect at the time, he did not have the opportunity to receive the money. The rules capped his maximum "prize" at $75,000. All "points" above 75,000 that he accumulated simply gave him the right to direct a charitable contribution to be made by the production company.

I think the rules you're citing only apply if the winner has the option to take the money. Frank didn't have that option. --Bob

kprather895
Loyal Jeopardista
Posts: 143
Joined: Thu Mar 20, 2014 2:32 pm

Re: $75,000 rule

Post by kprather895 » Thu May 02, 2019 7:51 pm

Makes more sense that Frank would just report the $75,000 that he received. That way, Jeopardy gets to say that they made the charitable contribution, and they get the write-off.

User avatar
The Answer Is
Newbie
Posts: 9
Joined: Mon Apr 29, 2019 2:14 pm

Re: $75,000 rule

Post by The Answer Is » Fri May 03, 2019 6:10 am

When the board values doubled late 2001, the $$$ limit went away, but the five-day limitation remained until Autumn 2003.

User avatar
Robert K S
Jeopardy! Champion
Posts: 1613
Joined: Thu Jun 30, 2011 1:26 pm
Location: Cleveland, Ohio
Contact:

Re: $75,000 rule

Post by Robert K S » Fri May 03, 2019 2:39 pm

The Answer Is wrote:
Fri May 03, 2019 6:10 am
When the board values doubled late 2001, the $$$ limit went away, but the five-day limitation remained until Autumn 2003.
That's what we think, but we're looking for the paperwork proof.

User avatar
jeff6286
Watches Jeopardy! Way Too Much
Posts: 4551
Joined: Fri Jul 01, 2011 7:34 pm
Location: Indianapolis, IN

Re: $75,000 rule

Post by jeff6286 » Fri May 03, 2019 2:50 pm

Jeff-thecdboy wrote:
Fri Oct 30, 2015 9:34 am
The money limits that J! had (before the dollar values were doubled in 2001) were as follows:

1984-90: $75,000
1990-97: $100,000
1997-01: $200,000
sorry if this is a dumb question but Is the TOC excluded from this? Seems odd they would limit Frank to $75k in winnings but then bring him back for a TOC with a $100k top prize. I assume somehow the money limits were just for regular play?

Ivoryface86
Loyal Jeopardista
Posts: 155
Joined: Tue Aug 23, 2011 3:52 pm

Re: $75,000 rule

Post by Ivoryface86 » Fri May 03, 2019 3:04 pm

jeff6286 wrote:
Fri May 03, 2019 2:50 pm
Jeff-thecdboy wrote:
Fri Oct 30, 2015 9:34 am
The money limits that J! had (before the dollar values were doubled in 2001) were as follows:

1984-90: $75,000
1990-97: $100,000
1997-01: $200,000
sorry if this is a dumb question but Is the TOC excluded from this? Seems odd they would limit Frank to $75k in winnings but then bring him back for a TOC with a $100k top prize. I assume somehow the money limits were just for regular play?
Yes, the money limits were only for regular play.

Post Reply