Accept my WIN?

S

soonergal11

New member
Need advice. I just won this from Cosmo:

Cosmo Bachelors Event Gift Bag: American Apparel Tote, American Apparel Shirt, Anthony Logistics for Men Shave Set, Cufflinks from Cufflinks.com, Dufflet Petite Indulgences Cookies, Got2b In Play Sculpting Paste, Johnathan Get Dirty! Spray Dirt Hair Spray, Katy Perry Teenage Dream CD, L'Oréal Men's Expert Hydra-Energetic Eye Roller, Nivea for Men Revitalizing Eye Roller, Nivea for Men Revitalizing Lotion, Sopranos Sites Tour for 2 from On Location Tours, Pop Chips, Sh*t My Dad Says (book), $250 Tourneau Gift Certificate, True Blood: The Complete Second Season DVDs, and the November issue of Cosmo (ARV $650)

I was so excited, but the more I thought about the more I wasn't sure it was worth paying taxes on. Does that really happen!??! For example it includes a $250 Tourneau gift card which sounds great, but you can't shop online, there is no store in my area, and their watch prices are more in the thousands. Also, I don't live in CA so the "tour" wouldn't be used. I could care less about a season a true blood and the rest is mens beauty care that my husband doesn't need.

So what kind of tax implication am I looking at for an ARV of $650? I have the money to pay, it's just I don't want to basically pay for something I am not going to get to use...essentially.
 
My advice is to pass on this one. Sounds like you can't use most of the stuff so why pay taxes on it? This has happened to me before too and I've passed on gift bags like this one.
 
I am not positive, but i thought you only had to claim the win if it was over $1200. i won $1000 in Reno once and did not have t pay taxes on it.
 
First of all, the IRS requires that you report "ALL" prizes. Whether the sponsor reports it themselves or you report it on the honor system. The sponsor can report any size prize, even a candy bar, if they so wanted to. The IRS only mandates that the sponsor report all prizes over $600. Even if the sponsor doesn't submit a 1099 or the prize winner does not receive tax papers on it from the sponsor for tax time, the winner is still responsible for reporting the prize on their tax return.

As for the reporting the value of the prize, the IRS requires that you report the FMV (fair market value) of the prize, not the ARV (approximate retail value). That means documenting true value(s) of the prize and reporting that amount rather than the ARV.

As for those who choose not to report a prize because they never received a form for reportable income at tax time, that doesn't necessarily mean that the sponsor never reported it to the IRS. So, it is possible that the IRS has a record of a prize you won and note the discrepancy of it missing on your tax return if they were to catch it.
 
I received an email today with an aff. to get notarized so yes, it will def. be reported. Thank you for all of your replies. It soooo hard to decide to pass on a prize and I haven't decided on what to do yet. It's just hard to pay taxes on $650 when I'm not really getting anything worth that much in my opinion. I have no idea what that tour is worth, but since I can't take it...it's worth nothing to me. Maybe I can talk to cosmo and see if they can help me out in some way. :/
 
it's thrilling to win but you have to ask yourself, is it worth it?I only enter contests that I would be willing to pay taxes on if I win--it's my :wave: new criteria
 
My rule of thumb when I win a prize other than what I entered for {ie the trip instead of the $500 visa card I was going for} is to look at the rules to see if they will attempt to re-award it or not.

If yes, I politely turn it down and let them know right away. If they don't? THEN I would contact them and see if they would give a substitution.
 
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