Gripe about Burger King Necklace win!!!

A

ashleyh8584

Member
I'm not sure if anyone remembers the Burger King Pink Panther 2 Game that gave away a $3500 diamond and pink sapphire necklace daily. I received my prize, paid taxes on it, and basically forgot about it. Well, I decided two years later that I might as well sell it because I have never worn it, and it just collects dust. So I took it to get appraised and to see what I could get from it. I found out that the 8 surrounding pink sapphires aren't even pink sapphires but rubies. Then I found out that the 1/2 carat diamond has a large flaw in it, and as he said is of poor quality. He said he wouldn't even pay $500 for it and offered me $200. I can't believe that I accepted this prize and paid taxes on crap. Live and learn to never accept jewelry ever again. I am so disappointed in Burger King, but mainly in myself for believing it was worth $3500 and not trying to get a fair market value.
 
The IRS requires that you pay taxes on the fair market value (FMV) of a prize not on the "APPROXIMATE" retail value (ARV).

On any prize you win, you must document the lowest price at time of receipt of the prize of it's true retail value. On jewelry, you must first have the item appraised with the appraisal documented.

If the sponsor supplying the prize does not reflect the true value of a prize won on the 1099 submitted to the IRS, you can do one of two things. You can request the sponsor change the 1099 reflecting the true value of the prize or you can submit the true value of the prize as "Other Income" on your tax forms with backup documentation of true value.

As with anything else in life, an individual is responsible for knowing all the ins and outs and responsibilities of any undertaking.

At least you will be prepared for reporting any future prizes! :) There are many other people who have made the same mistake.
 
:crazytongue: What a disappointment for you! Sometimes not knowing is bliss. At least you would have thought you had an expensive keepsake.
 
From what I have read through the years, most people winning jewelry got appraisals for no more than half the stated ARV; and, more times than not, far below half the stated ARV.

Unfortunately, the OP already overpaid far more in taxes for it than what should have been paid.
 
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