Won a contest, should I accept?

[Dimsumkid]

Having really good luck w/contests this year. Here's the details of the latest, I need to accept by tomorrow! Opinions? I omitted names to keep it generic.
Here's what'a included:

1) A private tour for 6 guests to a Botanic Garden (incl pontoon boat ride),
2) includes a picnic - was told this is a basic picnic basket;
3) one (1) night camping - (this might be a mistake).

On a subsequent day, 6 guests of an Arboretum will be provided a special experience, including:
4) fishing on a lake - catch and release only,
5) camping on Arboretum grounds - (very basic camping $45/ea),
6) dinner (most expensive I could find $70/person) and
7) a guided night hike - (guide cost $115).

8) I will also get a check for $2,520.

TOTAL VALUE $11,320!!! I will get a 1099-MISC for this.

Here's the problem for me, based on the research I was able to do, the two separate events break down to $8800 or $4400 each location, there are no specific details available. The only real expensive item is the private tour (#1) that I can't put a value on, everything else can be approximately priced. Honestly, I think this total is grossly over valued and I don't see how they came close to this total. I talked to both locations and they don't know where these amounts came from and one location said it was over valued. I'm responsible for the tax bill, that's why they added the check to help cover the taxes that will be due.
We're not campers, never been in my lifetime, but I'd be willing to try for one night. We'd have to buy/rent equipment. The big issue I see, this prize will increase my AGI by this amount, in which, I would imagine, make sure we won't qualify for the healthcare subsidy.

I'm looking for opinions... Accept or Decline?

[daylatedollarshort]

Most of the stuff you listed are things we can do in our local area for free or pretty cheap.

Visiting a botanic garden - lots of local gardens free or inexpensive
Boat rides - inexpensive at local lakes. Duck tours are ~$20 a person through Goldstar.
Picnics - $20 with deli food and wine from Trader Joe's.
Camping - $20 a night maybe at a state or county park
Night hikes - free at state parks
Fishing - lots of places to fish for free or nominal cost

You can run the numbers in a tax program, and see if the extra money more than covers the taxes and any health care subsidy loss. I'd probably pass on it.

[yakers]

As I understand the issues the key problem is the value reported on the 1099. Does one have to accept this to the IRS? A friend won a dress on a radio give away, a top named place and got a 1099 for $800 or $1,000 (can't remember exactly). The place does sell some dresses to some people at this rate but she could find similar dresses for much, much less and it wasn't worth the taxes on $1K to her.
This looks like the opposite issues people have when valuing donations of property to nonprofits, try to get them high for the tax deduction. Like the problem of donating cars which was somewhat fixed by the IRS one can only claim the actual resale price of the cars, not some 'market value'. So anyone have to deal with this? Can one take the item and report something else on the 1099?

[Bestwifeever]

Damn, you could probably take your family to Hawaii for a week for $11k. See if they can give you the money instead . Just kidding about getting the money, but still.

[LoneAspen]

$11,320 sounds way overpriced to me, especially since you're going to get taxed on it.

But it might be a wash with the $2520 they throw in...I'd check the fine print REALLY carefully on that, too, to make sure there aren't any gotchas with that money.

Whether it's a wash or not depends on your tax bracket, of course.

But it just seems really overpriced compared to the events listed.

[Dimsumkid]

Quote:

Originally Posted by yakers As I understand the issues the key problem is the value reported on the 1099. Does one have to accept this to the IRS? A friend won a dress on a radio give away, a top named place and got a 1099 for $800 or $1,000 (can't remember exactly). The place does sell some dresses to some people at this rate but she could find similar dresses for much, much less and it wasn't worth the taxes on $1K to her. This looks like the opposite issues people have when valuing donations of property to nonprofits, try to get them high for the tax deduction. Like the problem of donating cars which was somewhat fixed by the IRS one can only claim the actual resale price of the cars, not some 'market value'. So anyone have to deal with this? Can one take the item and report something else on the 1099?

Yes, we won a 55" tv earlier this year too, so we're expecting a $2500 1099-MISC for this and plan on showing the same make model tv that was selling for $1400. The IRS allows you to show real value as long as you have proof.

[Dimsumkid]

Quote:

Originally Posted by Bestwifeever Damn, you could probably take your family to Hawaii for a week for $11k. See if they can give you the money instead . Just kidding about getting the money, but still.

I'm with you on this idea, but I'm thinking this would get us more like 3-4 weeks or more!

[CCdaCE]

When will they have time to work in the timeshare pitch?

-CC

[Walt34]

This is the reason we passed on a "free stay" for three nights at a resort hotel in Phoenix, AZ several years ago. Airfare, meals, car rental, etc. approached $3k for us so we passed. Just wasn't worth it.

[jollystomper]

I tend to be wary of contest prizes that end up costing me money. Perhaps I'm old school, but winning a prize always meant "nothing out of your pocket".

[David1961]

Not sure about the tax rules, but is there any way you could accept the entire gift, then donate everything except the cash to a charity? So then you would pay the taxes only on the cash.

[JustMeUC]

I would ask that you name where this place is so that I can be sure NEVER to darken their overpriced door step!

[Dimsumkid]

I just got a call from the sweepstakes company that is managing the prize distribution for this contest. They extended my deadline to next Friday to give them time to gather all the information that I requested. I did some further checking about donating the portions to charity and my tax bill will increase and doing a charitable donation will not decrease my tax bill at all.

[braumeister]

Since the numbers don't make sense, it smells fishy to me, and I would decline.

[Badger]

You rarely hear about contest prizes being anything but over estimated on the value. I've been seeing this for a number of decades. This sounds like another one. Whoever is conducting the contest inflates the value to write it off on their taxes . The only prize I would accept is money.

I can't imagine a tour, picnic and camping in a Botanical Gardens then a day of fishing, hiking in the woods, and a dinner for 6 people being worth more than $1000. Except for the picnic and dinner I do all those things for free.

Cheers!

[Powor]

This is a tough question. Do you remember signing up to win this vacation? If so then I am sure it might be okay, but if not steer far far far away from it. I am sure that it is fine though if they aren't asking you for money before hand, but like stated above read the fine writing before you accept anything. If it feels wrong then it probably is, so just be cautious.

[Dimsumkid]

Quote:

Originally Posted by Powor This is a tough question. Do you remember signing up to win this vacation?

Yes, this is something I entered, it's legit and the contest sponsor is a Fortune 150 company. It's always the "we'll enter, but you almost never win" that really shocks you when you do win a contest. I've been searching overvalued contest prizes and it's appears to be a pretty common practice. My mindset is to focus on getting written proof for the Fair Market Value of the "private" events at the Botanic Garden (tour, pontoon boat ride) events that can't be publicly priced. You almost never hear of contests providing money to help cover the tax bill, other than on Oprah's show.

[Ozstache]

Accept the check only and decline the rest of the massively overestimated prizes. If they won't give you just the check, run.

[plex]

Probably worth it if you can accept the check only, and turn down the rest. But if you have to take the whole thing, and don't particularly love camping, and don't plan to do more of it, I don't see much point accepting. The tax hit and expenses are almost certainly going to be larger than the value of what you are getting.

[Dimsumkid]

Quote:

Originally Posted by plex Probably worth it if you can accept the check only, and turn down the rest. But if you have to take the whole thing, and don't particularly love camping, and don't plan to do more of it, I don't see much point accepting. The tax hit and expenses are almost certainly going to be larger than the value of what you are getting.

I did ask if I could take just the cash (and also all cash value instead of prizes) to the sweepstakes company. It's an all or nothing prize acceptance. I do have a 13 yr old that would like to experience camping. My only possibility of saying yes is to get a much lower fair market valuation with proof if/when there's an IRS letter or audit questioning it. It appears to be the winner's burden to justify to real numbers.

The 1st item - private tour of a includes a garden not accessible to the public w/boat ride may have been valued using a recent charity auction for just tea in this private garden and it sold for $3300. I know people/businesses tend to pay up for charitable donations. This gives a solid like item comparison for my prize 1).