2009 Win...Prize not received til 2010...tax question

snoop176

snoop176

New member
Hi Everyone -

Just curious...Didn't know if anyone had a similar situation and may know from previous experience.....

I won the Lenovo check for $1000 in 2009, but have not received my check yet (realizing usually takes a few weeks/months). Since I will not be receiving the prize til 2010, should I expect a tax form for 2009 or 2010?
 
You didn't receive or cash the check in 2009 so if you receive a 1099 or other tax form it should only be for tax year 2010.
 
I actually had this happen to me. I won a trip in December 2007 for a February 2008 trip to the Daytona 500. And received a 1099 to pay taxes on it for 2007. I was told it was awarded in 2007 so had to pay taxes on it then. Luckily it didn't make a big difference on my taxes but it is better if you can know a head of time and maybe change your withholding. But anyway congratulations on your win!!!
 
You do not pay taxes on a prize until the year you actually receive it. If you receive a 1099 for the year before you receive a prize, hold on to it and submit for the year the prize is actually received and/or request the sponsor resubmit it for the actual year you receive the prize. Per the IRS, you have every right to do this and request a sponsor adjust the value to the fair market value (FMV) which is what they require be reported instead of the approximate retail value (ARV).

The reason for this is the difference in price between the time you win it and the time you receive it. The IRS requires you submit the fair market value of a prize at the time of receipt, and you can't very well do that until you get it. Prizes and trips can tremendously fluctuate in value during that time period. Especially, electronics which drop in value quickly. Even trips can drop in value depending on the season and economic climate the trip is taken in. :)
 
lol...thanks for all the responses..I guess I will wait to see what happens.. will keep everyone posted.

:sunny:
 
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