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Author: EarlyToRise Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121188  
Subject: Re: Question based on TV show Date: 4/13/2011 10:27 AM
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met a guy in the 70s who won a bunch of stuff on a game show.
the rule then was 'retail value' and he argued that was unfair...


My wife won a car about 5 years ago. We took delivery of it from the dealer and then sold it 3rd party on AutoTrader for about $3000 less than sticker price. However, we received a 1099 for the full sticker price. But the sticker price was not the fair market value.

We filed taxes based upon the fair market price we were paid by the 3rd party; the IRS sent us a mail audit asking why our 1040 did not match the 1099. We responded with a letter and documentation of both the AutoTrader listing and the actual proceeds of the 3rd party sale, arguing that the amount we should be taxed on is the "willing seller, willing buyer" price, not the sticker price.

To our pleasant surprise, the IRS responded that they agreed and our 1040 was accepted.

ETR
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