Skip to main content
Message Font: Serif | Sans-Serif
 
No. of Recommendations: 4
I would appear that AA's intention was to make acceptance of the prize so costly that it wouldn't be accepted by the winner, and AA is out nothing for some free publicity and apparant generousity. ed

How about a more generous position?

AA is simply following the letter of the law. It is the IRS (enforcing laws passed by Congress and signed by the President) that is requiring the full FMV of the prize to be shown on a 1099. Why would AA do any less than follow the law? There is simply no benefit to them to do any less.

For the person who wins a travel prize, this is a common problem. (And it's not uncommon for other prize winners as well.) The contest promoter wants the prize to look as big as possible. And, given the right set of circumstances, that IS was someone could pay for the travel. No one in their right mind would do so, but you could.

I have in the back of my mind that someone successfully challenged the valuation of a prize as reported on a 1099. I can't find a reference to the case at the moment, so maybe my recollection is failing me. But if I remember right, the issue is that a 1099 is not definitive. The issuer's opinion of FMV can be challenged.

--Peter
Print the post  

Announcements

Disclaimer:
In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.