Winning tickets to a charitable event

I won a pair of tickets (from a radio station) to a
charitable event. These tickets were being sold for $275
each, and are marked as having a fair market value of $50.
Thus, if I were to purchase these tickets, I'd be eligible
for a $225 charitable deduction per ticket.

Since I won these tickets, the radio station will be sending
me a 1099 for $550 (plus other, previous winnings that get
me over the $600 limit).

Any opinions on whether I can dispute the $550 value? I say
that the fair market value ought to be $100.

If I had purchased the tickets, I'd get a $450 deduction.

If I win the tickets and donate $550, shouldn't I be in the
same position?

Any thoughts on this?

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Reply to
NoSuchPerson
You don't have a charitable contribution at all. The charity didn't get anything from you. Talk to the radio station and see what they plan to issue any 1099 for. At best, it's the stated value of the event, which is $50 per ticket.
-- Paul A. Thomas, CPA Athens, Georgia
Reply to
Paul Thomas, CPA
I would. You won admission for two for the event, which is evidently worth $100, which is the amount of your prize income. -- Phil Marti Clarksburg, MD
Reply to
Phil Marti
wrote:
If so, they would be wrong. The FMV for the two tickets is only $100. What $600 "limit" are you talking about?
That is correct. Enter $100 on Line 21 of your 1040 and write "raffle prize" (or some such) on the dotted line. If you get a 1099-MISC for $550, ignore it.
True, assuming you itemize your deductions.
Not exactly. If you win the tickets AND donate $550, then you would have a $550 deduction. The tickets are irrelevant to your donation deduction.
Reply to
Herb Smith
Is the $225 charitable contribution optional? If not, I think the radio station is correct. The FMV they quoted is what it costs to attend similar shows on other nights, but NOT the night that you'll be going. They're giving you tickets that you would have had to pay $275 for, so from your perspective you were given something worth $275.
The radio station presumably paid $275 to the charity, or maybe somewhat less because they bought in bulk, and THEY get to take the charitable deduction. For you to take the deduction, I think the contest would have to be structured the following way: the radio station buys the tickets for $50 (or maybe a wholesale price), and the winner has to commit to donate $225 to the charity. -- Barry Margolin, snipped-for-privacy@alum.mit.edu Arlington, MA *** PLEASE don't copy me on replies, I'll read them in the group ***
Reply to
Barry Margolin
These tickets are Other Income, not Schedule C items. So the is no $600 threshold.
Declare the $550 and make a $450 adjustment to your income.
Make copies of the 1099 and the tickets in case you are asked for an explanation.
Dick
Reply to
Dick Adams
If they won't do that (or if, as one person claimed, the $550 is correct) refuse the tickets. I have heard that there are warehouses in LA full of game show prizes that people refused to take because the taxes would cost more than the prizes were worth to them.
Reply to
Geoff
"Barry Margolin" wrote
FYI: Generally the charity gives these to the station to comp out as prizes for the promotional aspect. The charities I work with all do this for their events to some degree. There isn't any cash given by the station to the charity. Radio doesn't need to, and frankly can't afford to, buy all it's prizes. -- Paul A. Thomas, CPA Athens, Georgia
Reply to
Paul Thomas, CPA
(balance schnipped, since this only pertains to last statement above.) Never ignore a 1099. If you can't make the radio station see the error of it's ways in issuing it in the first place, and for an incorrect amount in the second place, declare the 100$ on form 1040 but also include a copy of the 1099 and your explanation as to the actual facts as responders here have brought up. ChEAr$, Harlan Lunsford, EA n LA
Reply to
Harlan Lunsford
I meant the $600 floor for issuing a 1099.
I meant my "net" position. If I made the donation, I would then have $100 income and $550 deduction, netting out at a $450 deduction.
Reply to
NoSuchPerson
That has been my experience as well. I serve on the committee for a local charity event. We have occasionally given out a few comp tickets to broadcast media, to help promote the events.
Reply to
NoSuchPerson
Note the hypothetical cases I originally stated:
A) If I hadn't won the tickets, and had paid $550 for them, I would have a $450 charitable deduction (nothing added to income, $450 is charitable deduction); B) If I won the tickets AND MADE A $550 DONATION to that charity, I believe I ought to be in the essentially the same position, i.e., received something with FMV of $100 (added to income) to be essentially netted against a charitable deduction of $550. Clearly, there are differences between (A) and (B), especially if I were in an income bracket where deduction limitations took effect -- I'm not quibbling about that.
Reply to
NoSuchPerson
The huge problem here is that the charity didn't get ~anything~. It's very hard to convince a jury of your non-peers that you get a charitable deduction when the charity has no additional in it's coffers because of it. How much did the charity get? $0
That's the amount of the charitable deduction.
-- Paul A. Thomas, CPA Athens, Georgia
Reply to
Paul Thomas, CPA
How much clearer can I get? I posed a hypothetical, wherein I *DID* separately make a $550 donation to that charity. I still can. I may yet even choose to do so.
Reply to
NoSuchPerson
He was responding to your point that you "should be in the same position". Of course if you give $550 to a charity you get a deduction. But that's totally separate from the tickets you won. -- Barry Margolin, snipped-for-privacy@alum.mit.edu Arlington, MA *** PLEASE don't copy me on replies, I'll read them in the group ***
Reply to
Barry Margolin
I forget the cut-off amount but for gifts over a certain number (it was $250 the last time I checked) you have to have a receipt from the charity of the gift isn't deductible. Your cancelled check is not sufficient. Stu
Reply to
Stuart Bronstein
Why? Can you show that the tickets sold elsewhere for $100?
If you can show that (perhaps you know someone who bought the tickets for $550 and got a letter from the charity specifying the $450 contribution, who'll let you copy it; or perhaps you have a copy of the newspaper ad that says so), then the fair market value is $100. Years ago, the Grateful Dead would play six shows at Madison Square Garden. Tickets for 5 of them were $28. The sixth was a benefit, and tickets cost $33, of which $5 went to charity. That did not constitute a charitable contribution for the buyer, because the fair market value of those tickets was $33 (probably higher, but the GD artificially held down ticket prices). Seth
Reply to
Seth
What does that have to do with this? Surely the charity would provide a receipt if he made a direct donation like this. But the $550 check is totally unrelated to the event that the tickets were given away for. -- Barry Margolin, snipped-for-privacy@alum.mit.edu Arlington, MA *** PLEASE don't copy me on replies, I'll read them in the group ***
Reply to
Barry Margolin

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