Contest Prize Taxes

[cpeac999]

What is the name of your state (only U.S. law)? Oregon
My school has entered a national contest and have been informed we are in the finals. I understand that we are responsible for taxes if we win. Can you tell me - if we collect donations to pay the taxes, are we liable to pay taxes on the donations? Is there a limit to the amount any one person can donate? Is there a limit to the amount of donation we can receive before we are liable to pay taxes? OR do we EVER have to pay taxes on any donation? I know we don't pay taxes on grants we receive. Do donations fall into the same category as grants? Do donations have to be given to us 'no strings attached'? Lots of questions!!! Thanks!

 

[LdiJ]

What is the name of your state (only U.S. law)? Oregon
My school has entered a national contest and have been informed we are in the finals. I understand that we are responsible for taxes if we win. Can you tell me - if we collect donations to pay the taxes, are we liable to pay taxes on the donations? Is there a limit to the amount any one person can donate? Is there a limit to the amount of donation we can receive before we are liable to pay taxes? OR do we EVER have to pay taxes on any donation? I know we don't pay taxes on grants we receive. Do donations fall into the same category as grants? Do donations have to be given to us 'no strings attached'? Lots of questions!!! Thanks!

Does the prize go to the school, or to the individual students that win the prize, or to an organization within the school, such as the PTA, Band, Choir etc.

What is the prize?