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If you can document the cost that your trip would cost if you purchased it yourself, I think you can use that instead of the 1099 value.

The question would be "What constitutes sufficient documentation for IRS purposes?" I would think the best would be an advertisement in a newspaper, but I suspect a written statement from a travel agent stating that if purchased 3 weeks in advance a pair of round-trip tickets from x to y leaving on date z and returning on a would cost $b would be sufficient to justify the prize having a fair market value of b. That is, provided that the trip you take matches that profile (same departure and arrival airports, same dates, same fare class). Probably a fax from the travel agent would do.

I don't know if a computer printout from a rate finder web site would do. Maybe one of the tax professionals could respond about that.

The problem with airline fares is that they change so much and the same flight can have passengers who paid a low fare because they bought early and may have also had some special discount to people who may have gotten on at the last minute and don't have a Saturday night stay and ended up paying top dollar. And it is likely the 1099 prices the most expensive fare for the most expensive trip that meets the fine print, which, if it is domestic, could be from a non-major airport to another non-major airport with several plane changes, not on a major hub to hub route with several competing airlines.

The trick is to have appropriate documentation on what the FMV of the prize really is when it is lower than the 1099 declaration. And keep that documentation with your copy of your tax return because you may receive a call or a letter requesting justification for your numbers.

Please, though, wait for someone more competent with tax laws to respond or run the above across your tax preparer before acting on it.
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