Thank you -- I decided not to show up for the drawing; I was told by the slot booth that the package was valued at $2000, which is much more than its FMV. What I wasn't sure about was whether I could have claimed the FMV as the income I received rather than using the value listed in the casino's paperwork (why, btw, does the casino have to inflate that value? Do have have tax benefits in doing so?).
I would have been more inclined to go after the prize if I had realized I could have declared the FMV. If, as suggested by one poster, I sold the package on Ebay, and got $600 for it, would that not be the FMV? Then I would simply pay taxes on $600 and come out quite a bit ahead.
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-------------- Original message ----------------------
From: John Clark <jaycee5353@yahoo.com>
--- Original Message ----
From: Jean Scott queenofcomps@cox.netAlso, if you win a drawing or win a prize, you do not have to use the
paperwork amount as income as that is usually a much-inflated amount. For
all such "prizes" - gambling or not - the IRS allows the "fair market
value." I discuss that at length in the book since I have had personal
experience winning a car with a sticker price on the 1099 but I sold it back
to the dealer for a lesser amount, which I used for my tax return. You must
add a note of explanation, however.This is correct. I won an Alaska Cruise and used the newspaper advertised price
on my tax return rather than the 1099 inflated amount. That was the good advise
I got from Marrisa.________________________________________________________________________________
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