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Thread: ARV and your taxes {TY to LIDARKSIDE}

  1. #1
    Sweepstakes Plus Member amyshulk's Avatar

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    ARV and your taxes {TY to LIDARKSIDE}

    Information courtesy of this link ~ http://contests.about.com/od/taxesfi...t/FMVvsARV.htm

    When you win a sweepstakes prize, you are only required by the IRS to report the fair market value (FMV), not the sponsor's approximate retail value (ARV); but how do you go about finding out what the FMV is and how do you handle the difference on your taxes? Find out here.

    http://contests.about.com/od/taxesfi...t/FMVvsARV.htm
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  2. #2


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    Re: ARV and your taxes {TY to LIDARKSIDE}

    Wow, thank you so much for that info. I have won a few tvs that the value was way higher than I could have bought them for at the time. I just paid the taxes based on the 1099.. Lesson learned for me. Thanks!!

  3. #3
    Sweepstakes Plus Member lisat821's Avatar

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    Re: ARV and your taxes {TY to LIDARKSIDE}

    Thanks so much for that info. I sent it to my mom who won the trip to Sundance coming up next week! (love to get family members hooked on SA!)

    Now it's nice and concise and we can refer back to it when we win lots of stuff!
    ***************************************
    Happy Sweeping! Good luck everyone!

    ************

  4. #4


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    Re: ARV and your taxes {TY to LIDARKSIDE}

    The IRS states that the Form 4598 is obsolete.

  5. #5
    Sweepstakes Plus Member jupiterzeus19's Avatar

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    Re: ARV and your taxes {TY to LIDARKSIDE}

    VERY INFORMATIVE AND RIGHT ON, THANK YOU! :wave:

  6. #6
    Sweepstakes Plus Member amyshulk's Avatar

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    Re: ARV and your taxes {TY to LIDARKSIDE}

    Quote Originally Posted by LIDARKSIDE View Post
    Quote Originally Posted by whitecoma View Post
    Thanks for the info. Yeah, she is a CPA. I am going to have to find out about this. I try never to cheat on sweeps and sweeps winnings. Bad Karma you know! I try to keep my Karma good and it seems to work out well. I have been very blessed with what has been given!
    Here's one section from the IRS that defines reporting prizes (Page 4, Box 3, Other Income):

    http://www.irs.gov/pub/irs-pdf/i1099msc.pdf

    It's pretty straight up--report the required reported income of $600.00 or more on 1099's, and report other prizes and awards. You'll notice that they don't define prizes as those that are reportable and those that aren't. It's straight up "also enter in Box 3 prizes and awards...". There are three exceptions, but you'll see none cover winning and accepting a prize.
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  7. #7
    Sweepstakes Plus Member amyshulk's Avatar

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    Re: ARV and your taxes {TY to LIDARKSIDE}

    Quote Originally Posted by Amy Shulkusky View Post
    Many times I've read posts where the winner took the time to contact the sponsor to determine if they *had* to do an affy when they won a lower tier prize - most of the time, the answer was yes.

    But, unless you ask, you don't know if they only had one type of form and only those who won prizes worth $600 or more really needed to get the form notarized.

    I guess the people doing the fulfillment just assume? :scratch:
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  8. #8
    Sweepstakes Plus Member amyshulk's Avatar

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    So you want to win a car ( tax update)

    Quote Originally Posted by johnsnook View Post
    Well, as some of you know, I won a JEEP WRANGLER last year, ARV $35,000, well I traded that for a lesser JEEP and some cash. Now it's tax time and I find out that, even though I traded for a lesser car and cash, I still have to pay the tax on the original ARV, because the IRS does not care what you do with your prize, or who you sell it to, even if you take a loss, they want the whole shebang. Well, I got a new car and enough cash to pay the taxes (state and fed) plus $3000 left in cash. Disappointing, but at least I got a car and some cash. So, if you are trying to win a car, or house, or anything big, please think about the tax that you will have to pay, and make sure that you can pay it, either out of pocket or by sale of the prize with some profit for you. And, also get some proof of the real ARV of the prize by looking on the net and recording it in case the sponsor hits you with a high 1099 value.
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