A 20-year-old Jamaican pilot is now the owner of a $2.4 million Hawker business jet because he outlasted two other contestants in a YouTube contest that started with 99 others. Jabari “Treezy” Brown won the aircraft in the 100 Pilots Fight For A Private Jet competition on the wildly popular MrBeast YouTube channel. The contest featured a variety of stunt-based competitions (including a segment where one of the engines of the Hawker is used to blow the contestants off a pedestal) but ended with a winner-take-all endurance test in Saudi Arabia where the last of three remaining contestants had to maintain contact with the plane. After more than 22 hours, Brown prevailed.
MrBeast, who is Greenville, North Carolina, native Jimmy Donaldson, is a 27-year-old YouTube phenomenon with 453 million subscribers, and 66 million people had viewed the video in the three days after the contest concluded. His extravagant contests and stunts often feature expensive luxury items, and this was at least the second business jet that he’s given away. He reportedly makes more than $500 million a year and gives away a significant amount of it to a variety of causes. He started his channel in 2012.
A lot like those old-time dance marathons during the Great Depression, but they only got a meal for their endurance. I just shake my head…
Now you get to insure it, pay for annual inspections, and pay tens of thousands of $ to fill it up for each flight! Oh, and I’m sure you have to pay taxes on the prize winnings too. Basically, this is a bill for minimum $500k the first year. What a prize!
In the U.S. that’s true of pretty much any big prize winner. For instance, most of the EAA and AOPA planes that are raffled off each year are immediately sold to pay for the taxes. Or, a loan is secured with the plane as collateral to pay the taxes. Either way, it’s not a “free” plane.
In this case of winning a bizjet, an immediate sale would still net a nice profit for the lucky winner even after all the taxes are deducted.
However…
He’ll have to come up with the tax money BEFORE he can take delivery of the plane.
Not sure about Jamaican tax law but in Canada all winnings, including lottery and gambling, are tax free.
Same in Australia
Even foreigners have to pay the tax. If the contest and prize is conducted and awarded on U.S. soil, the taxes are still due regardless of where the winner hails from.
Unfortunately, the U.S. (unlike many other countries) considers most prizes to be “income” and subject to income tax(es).
Win a car, boat, airplane, or cash (via lottery or gambling), or other prizes (like a game show) and Uncle Sam takes a piece of it right away. The amount is about 24% up to 37%. Cities and states often have their own income tax. In the end a ‘winner’ could end up with as little as half the value of the prize.
For example, Edwin Castro was the largest single lottery winner after picking the correct numbers for the $2.04 billion PowerBall lottery prize. He opted for the lump-sum payout (instead of 20 annual installments). The reduced his prize to just under $1 billion. After taxes his final take-home winnings were $628.5 million. Not bad, but not $2 billion (the joke at the time was he’s the only billionaire actually getting taxed).
When winning a car/boat/airplane and not having enough cash on hand to pay the tax(es), recipients can either sell the vehicle to pay the income tax(es) and pocket the rest. Or they can take out a loan to pay the tax(es) with the vehicle as collateral.
It’s a bigger problem if you win something non-tangible, like a vacation at a resort or on a cruise. You can’t easily sell it nor can you get a loan. This is why many such prizes offer a cash equivalent in place of prize itself.
PS – Professional gamblers have fought this tax on the grounds that taking a portion of their final prize money immediately means they’ll have less to gamble with on the next contest. Without the extra money they’ll have to bet less, bluff less, and fold sooner, potentially missing out on bigger wins as a result.
PPS – I’m not a tax specialist and I didn’t sleep at a Holiday Inn Express last night. The above should not be taken as tax advice. Standard disclaimers apply (past returns are no guarantee of future results, actual mileage may be lower, etc., etc.)
Canadians can claw it back since U.S. tax does not apply to them. Lots of advertising for that at the airport in Vegas:)
Does that apply to sales tax?
After all that it said the contest took place in Saudi Arabia. So with that and the fact he is Jamaican, US tax law would not apply.
How long until AvBrief does the same with a balsa airplane co-sponsored by the 5&10?
First challenge: stick your tongue on the metal flagpole (I triple dog dare you!)
We’ll even spring for the big one with the landing gear and extra long rubber band. Loved those things…
Pulling a radial thru I’ll ask any curious bystanders to tell me when the aft fuselage starts to crinkle…usually separates out the generations via smile or confusion.
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Springing for landing gear implied a higher than usual level of optimism, obviously signaling you were doomed for a career in aviation.
Always went for the double crinkle. Adding a third usually broke the rubber band:)
Funny how being on Youtube quite a bit still shielded me from knowing any of these “superstars”.