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  1. #1
    dyllan Guest

    Taxes for Sweepstakes Winnings

    I live in Ohio.

    I recently won a Truck and Motorcycle in a sweepstakes run by Ford and Harley-Davidson. The approximate retail value for the two of them, according to the contest rules, is a bit over $53,000.

    I plan to sell them asap, but expect to get quite a bit less than $53,000. Yet I believe that Ford will be sending me a 1099 for the ARV of the vehicles. Is there any way I can either deduct the difference between the ARV and what I sell them for or claim income only based on what I sell them for?

    Otherwise I'm likely to spend at least half the selling price paying income tax on more income than I ever received.

    -Dyllan
  2. #2
    roamer5 Guest
    Ford will be issuing both you and the IRS a W-2G (gambling winnings). The amount in box 1 ($53,000) will be entered on form 1040, Line 21 and added to all your other income for 2002.

    You are not allowed to claim any loss on the sale of your vehicles.

    If you itemize deductions (mortgage interest, property taxes, etc.), you can deduct any gambling losses on Schedule A, line 27.

    Wish I had better news for you on this. The proceeds from your sale should be saved to cover both federal and state taxes.
  3. #3
    dyllan Guest

    Not really gambling...

    But it wasn't gambling. It was a sweepstakes - free to enter.

    Gambling implies that I'm risking something (ie, paying to enter most commonly).

    I was under the impression that it's treated as regular income, not gambling winnings.

    I don't gamble, so deducting losses won't help me.

    -Dyllan
  4. #4
    roamer5 Guest
    You're absolutely right. You only receive a W-2G when you wager.

    Ford should be issuing both you and the IRS a 1099-MISC with an amount in Box 3. This should be the Fair Market Value (FMV) of your prize and not the Actual Retail Value (ARV).

    The Box 3 amount is entered on Form 1040, Line 21, which is then totalled with all your other income.

    Unless Ohio has an exemption for this type of income, it will also be included on the state return.
    Last edited by roamer5; 09-27-2002 at 02:53 PM.
  5. #5
    Hammy Guest
    dyllan,

    Can I be nosey & ask if you weren't going to keep them, why did you enter? I'd at least keep the truck..

    I am always filling out contest forms, that's why I am courious.

    AND believe it or not, I was looking to post a very similiar question. I won $$$ from an online survey site (YES you can win!! )
    and wondereed if I could use my losing lottery tickets. But since I didn't pay anything to enter (except my monthly ISP charges!!) I guess this will also just be added to my income.

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