What can I do about a free prize that ended up not being free? A brief Q and A:
Dear My Hometown Lawyers,
I recently became a winner at a radio station call-in contest. The prize was $10,000 in advertised jewelry. However, upon appraisal from multiple sources, the prize was actually valued at closer to $2,500. The IRS still received a 1099 from the station for $10,000 and now I'm ending up paying more in taxes than the jewelry is actually worth.
A Wichita Falls lawyer helps us with the answer: First, it's important to note that even though you won the prize, you need to consider the taxes on the value of the prize. The question, then, is what is the actual value?
In your case, your estimates are as good an indication of this amount as the 1099 is. It's subjective and you might want to get more people involved. You want to protest the 1099 from the station and insist it issue one with the correct amount. This is a good question in general, however, and will likely require a bit more info to fully answer. The Texas Deceptive Trade Practices Act is another good source to look into.
I recently became a winner at a radio station call-in contest. The prize was $10,000 in advertised jewelry. However, upon appraisal from multiple sources, the prize was actually valued at closer to $2,500. The IRS still received a 1099 from the station for $10,000 and now I'm ending up paying more in taxes than the jewelry is actually worth.
A Wichita Falls lawyer helps us with the answer: First, it's important to note that even though you won the prize, you need to consider the taxes on the value of the prize. The question, then, is what is the actual value?
In your case, your estimates are as good an indication of this amount as the 1099 is. It's subjective and you might want to get more people involved. You want to protest the 1099 from the station and insist it issue one with the correct amount. This is a good question in general, however, and will likely require a bit more info to fully answer. The Texas Deceptive Trade Practices Act is another good source to look into.
