Tax question

[desireerenee]

Its that time of the year again, so i was wondering if someone might be able to answer this question for me!

I was wondering if you still needed to claim online store credit wins if you never used them(ie. deleted email)
Also what about the mcdonalds food prizes, if you dont use the game piece do you still have to claim?
Thanks in advance!

 

[davien]

All prizes are considered to be income. The IRS only enforces this if a prize is over $600 in value for which the sweepstakes company would have sent you a 1099 form. Though technically considered income I doubt many people declare free Big Macs on their taxes.

 

[desireerenee]

see I know that you have to claim all prizes as income, I just wasnt sure If the prize was never used, ( ex. mcdonalds game piece expired before ever being used) if the IRS would say you have to claim it. I would assume not, but you know what they say about assuming. lol

 

[curmudgeon]

All prizes are considered to be income. The IRS only enforces this if a prize is over $600 in value for which the sweepstakes company would have sent you a 1099 form. Though technically considered income I doubt many people declare free Big Macs on their taxes.

I don't think any of us declare the income unless we receive a 1099. As for the IRS, it's probably not worth their time to follow for the taxes on small dollar amounts.

 

[user123abc]

I don't think any of us declare the income unless we receive a 1099. As for the IRS, it's probably not worth their time to follow for the taxes on small dollar amounts.

One thnig -- if you win any 'significant' amount (i.e., so it's not just deemed a 'hobby'), you can usually use anything in the process of obtaining those wins as a deduction. That means things like memberships, software, newsletters, etc, etc. But of course - make sure you consult with a tax attorney - because it may vary in your case.

 

[amyshulk]

Only if you itemize tho - same with gambling winnings!

One thnig -- if you win any 'significant' amount (i.e., so it's not just deemed a 'hobby'), you can usually use anything in the process of obtaining those wins as a deduction. That means things like memberships, software, newsletters, etc, etc. But of course - make sure you consult with a tax attorney - because it may vary in your case.

 

[amyshulk]

Pretty sure receipt/acceptance of prize denotes tax status, not use of prize?

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.

http://www.sweepsadvantage.com/forum/questions-answers/17790-arv-your-taxes-{ty-lidarkside}.html

see I know that you have to claim all prizes as income, I just wasnt sure If the prize was never used, ( ex. mcdonalds game piece expired before ever being used) if the IRS would say you have to claim it. I would assume not, but you know what they say about assuming. lol