I won a contest, BUT I need advice!!

[nicolep91]

First of all, this is what I won.

I was selected as a First Prize Winner in the "Enterprise Family Reunion Adventure Sweepstakes" (which I actually do remember entering!). My prize (if I chose to accept it) is one (1) Family Reunion package consisting of up to twenty-five (25) t-shirts customized with one family name, one (1) banner customized with one family name, ten (10) disposable cameras, and one (1) Enterprise Rent-A-Car cooler. This prize package has an
approximate retail value of $1,000.

OK, I never thought I'd win something that I might not accept, but I think I might just do that. My email states that I will be issued a 1099 form for the retail value of the prize and I honestly don't think this is a prize I'd be willing to pay taxes for. I need some info on how much taxes I would have to pay (isn't it about 30% of the total value). What do you all think? Does this sound like a good prize to you? I'm not even sure which side of the family I would chose (my husbands or mine) if I accepted the prize, I wouldn't want to offend anyone.

HELP me please!! I haven't even talked to my husband yet, I just got this email when I got to work and he probably won't be calling me until this afternoon.

 

[mad4themouse]

WOW! Congratulations on winning but I have to agree with you on turning it down! Too bad you can't just ask them for the money instead.

I cannot imagine that those items could be worth $1,000. Someone has an over-inflated opinion of their products! If you are in the tax bracket that pays 30% in federal taxes, you would owe the government $300 for that stuff come tax time! If it were me, I would not be shelling out that kind of money for some disposable cameras, some t-shirts and a promotional cooler.

 

[Maleficent2]

but I think I stand the on the same side....turn it down.

Not worth the taxes in my OP.


Mal

 

[kendall]

to $1000 value...I think I would decline too.

 

[Eilonwy]

Congrats!

But I think I agree with everyone else, unfortunately. I don't think I would accept.

Maybe if it were something other than T-Shirts. Like 25 Lands' End polo shirts. That would be worth $300.

Too bad it's not valued at $599. Then you wouldn't have to pay taxes.

But it does feel good to win, doesn't it?

I think half of the trip sweepstakes I enter I might turn down in the end if I actually one anything. Sometimes I'm more interested in the 1st or 2nd prize, than the Grand Prize.

 

[nicolep91]

Thanks, guys!!

I agree with you and I think I'll go with my gut instinct and not accept this prize. It just doesn't seem worth the taxes and hassle involved. I haven't talked to my husband yet, but knowing him, he'll agree with me. I got caught up in the excitement of winning something and thought about claiming it for awhile but at least winning keeps me motivated to keep entering those contests!

Too bad I didn't win the grand prize!! If I remember correctly, it was a trip for 25 members of your family to WDW for a family reunion! I was so close and yet so far away....

 

[Maleficent2]

. Grand Prize: One winner will win a Family Reunion for up to One Hundred (100) people at a Busch Gardens or SeaWorld Adventure Park. The prize package includes up to fifty (50) hotel rooms, each for two (2) nights stay (double occupancy) at a three-star hotel of Sponsor's choosing, up to One Hundred (100) one-day admissions (all must be used same day at the same park) to one of the following Theme Parks: SeaWorld Orlando, SeaWorld San Diego, SeaWorld San Antonio, Busch Gardens Williamsburg or Busch Gardens Tampa Bay, a catered meal for up to 100 people at the selected Theme Park (no alcohol), up to One Hundred (100) customized t-shirts with the family name, Twenty-Five (25) disposable cameras, Two (2) banners customized with a family name, a professional family photo (with up to twenty-five (25) prints), and a $10,000 travel allowance. Approximate Retail Value ("ARV") of prize package is $20,000. Saturday night stay and twenty-one (21) day advanced notice required. Travel is subject to availability of lodging and transportation at the time of booking. All expenses not expressly stated in a package description, including but not limited to hotel incidentals, ground transportation, security fees, passport fees, travel visas, meals, gratuities, phone calls, excursions, or insurance are the sole responsibility of winner. Travel restrictions, conditions and limitations may apply. Sponsor will not replace any lost or stolen tickets, travel vouchers or certificates. Winner's travel companions each must sign a liability/publicity release (if a travel companion is under the age of majority, the signature of a parent or legal guardian will be required). Grand prize must be redeemed by December 31, 2004. First Prize: Twenty (20) winners will each win one (1) Family Reunion package consisting of up to Twenty-Five (25) t-shirts customized with the family name, One (1) banner customized with the family name, Ten (10) disposable cameras, and One (1) Enterprise Rent-a-Car cooler. ARV of each package: $1,000. The total value of all prizes to be given away is $40,000

No cash or other substitution, assignment or transfer of prizes permitted, except by Sponsor, who reserves the right to substitute a prize or prize component with another of comparable or greater value. Winners are solely responsible for all taxes and fees associated with prize receipt and/or use except as specified. Odds of winning any prize is based on the number of entries received.

Maybe you could ask for the cash!


Mal

 

[nicolep91]

Originally posted by Maleficent2
Maybe you could ask for the cash!

Mal

I thought of the same thing a couple hours ago after I finally read the official rules! (Great minds think alike, Mal!)

I emailed the lady who sent me my email this morning and asked her if there was any chance of my prize being substituted for something different (hopefully cash!!) but I haven't heard back from her yet.

Then I was thinking about Sue's experience with the Martha Stewart contest. I remembered her saying that her dh didn't want her to claim the luggage because they didn't need it and because of the taxes, but then she got that great gift certificate instead so it all worked out for her. I would really be kicking myself if my prize was substituted and I forfeited it by not returning the affidavit.

I'm going to wait until tomorrow to see if I hear from the contest people to see what they say. If I haven't heard back from them by then, I might just go ahead and sign the papers because they have to have it within 10 days. I guess I've done a complete 180 from this morning!

 

[Eilonwy]

Originally posted by nicolep91
Then I was thinking about Sue's experience with the Martha Stewart contest. I remembered her saying that her dh didn't want her to claim the luggage because they didn't need it and because of the taxes, but then she got that great gift certificate instead so it all worked out for her. I would really be kicking myself if my prize was substituted and I forfeited it by not returning the affidavit.

Well, I only got the GC because the luggage was discontinued. I still wish they had sent me cash instead. Why? Because I'm still waiting for my merchandise. Why am I still waiting for my merchandise? I called yesterday to check on it, and after being on hold a few times, and a three-way call with the UPS rep, I found out that my package was delivered on May 12th--to the wrong address!!! When they told me the house number, I thought it didn't exist. But after the phone call I figured out it's the house on the corner of my street. What those people did with my package, I may never know. And it's no longer my problem (I hope). MS is resending out (new) merchandise. And express shipping it at no extra cost. UPS is trying to figure out what happened to the package (and if they find it, they're returning it to MS). I don't know the people that live in the house where the package went, so I don't feel comfortable trying to find out what they did with it (for my own curiousity).

I won't go into the lengthy discussion of how I called last week (apparently after the package was mis-delivered) and the MS CS Rep told me it was coming by US Mail and she didn't have a tracking number. How then did the person yesterday have one? Oh-well. It SHOULD arrive tomorrow. I wouldn't say it's all worked out for me yet. (I did get a few items that had to ship direct from the manufacturer or needed personalization. Which makes the whole story that much weirder, because those packages had the CORRECT address.)

 

[Beanie]

Nicole, how wonderful that you won something in a contest!! All your hard work paid off!! I have to agree with the majority though, doesn't seem worth it to me...hopefully it will all work out for you though!!

 

[BCVOwner2002]

Congratulations on your win! Keep us posted as to whether or not you get a response. I wonder if they will substitute. Annmarie

 

[nicolep91]

Well, I heard back from the "contest lady" this morning. This is what she said: "There is no substituion for the prizes. There are some items in the cooler that were not mentioned in the rules such as hats, golf balls, footballs, and frisbees. Please let me know what you decide."

I still don't see how that can all add up to $1,000. What do you all think? My dh thinks I should go ahead and accept the prize since we normally have plenty of tax deductions that would offset the taxes we would have to pay. I think he just thinks it's neat that we won something.

Sue, sorry that your prizes from the MS contest still haven't shown up. I'd be wondering about those neighbors - I bet they kept your stuff. Keep us posted on that!

Thanks again everyone for all of the advice,

 

[nicknamy1996]

As to the amount it will cost you, it depends on what tax bracket you fall in.

If you are filing a joint return with an AGI of less than 47k or so. It will only cost you about $150 in federal taxes. In the next bracket it jumps to about $270, and if you're higher than that well then you need to stop asking us poor losers to do the math and ask your accountant... OK, Just kidding.

If you pay the taxes up front they should charge you 27%, and then you get the difference back at the end of the year if you are in a lower bracket.

If you do not pay anything now, when you claim it at the end of the year it should look like $1000 of extra income on which you did not pay taxes, and will reduce your refund(most likely by 150-270 dollars)

PLEASE DO NOT QUOTE ME ON ANY OF THIS. I AM NOT AN ACCOUNTANT (HECK I PROBABLY CAN EVEN SPELL ACOUNTANT RIGHT). THIS IS JUST WHAT I THINK I HAVE LEARNED OVER TIME.

I say take the prize. If nothing else you can get a breakdown of what each item is worth (how it adds up to $1000) and use that same form/receipt to donate some of it to charity and take it right back off your income. (EX. If they say the football is worth $100, then donate it and that will save you $15 to $30 of the taxes)

 

[nuke]

Congratulations!

I would accept the prize too. It's just fun to say you actually won something.

 

[nicolep91]

Thanks nicknamy1996 for the info. That was about what I had figured for the taxes and your spelling of accountant looked right to me! And thanks for the idea about donating some of the prizes, I probably wouldn't have thought of that!

Nuke, we did go ahead and claim the prize. I thought, 'what the heck' and emailed Melanie (I feel funny calling her the "contest ladY") back and told her that I would be returning the affidavit and she replied that she thought I would be "pleasantly surprized with my prize", whatever that means - I'm taking it for something good!

Thanks again, everyone. And good luck to you all with entering those sweepstakes!

 

[phorsenuf]

Originally posted by nicolep91
and she replied that she thought I would be "pleasantly surprized with my prize"

When you recieve everything, make sure you post all the goodies that you got!!!
I never win ANYTHING!!!!!!

 

[Eilonwy]

Originally posted by nicolep91

Sue, sorry that your prizes from the MS contest still haven't shown up. I'd be wondering about those neighbors - I bet they kept your stuff. Keep us posted on that!

Well, I got my package today. Everything is there! Had a little chat with the UPS guy, too. He asked if it was a duplicate order, because he remembered the MS box. I explained to him what I knew. He was relieved that it was their (MS) error and not his. I told him I was relieved that it hadn't been stolen (well, not from my porch, anyway). He says he has been driving by twice a day looking for the package at the other house, but they haven't tried to return it yet. He said he shouldn't jump to conclusions and judge the people, but wondered (like the rest of us) how they could just "keep" the box. I don't know if anyone's actually gotten in touch with the other people.

 

[marzinet]

Too bad it's not valued at $599. Then you wouldn't have to pay taxes.

Strictly speaking, that's not true. You are obligated to pay taxes on any miscellaneous income you receive. However, they company paying you is only required to send you a 1099 if the winnings (or any other miscellaneous income) is more than $599. They could choose to send you one even if it's less, though.

If they don't send you a 1099, you're welcome to ignore the winnings or income. But you have to realize that if the IRS, for some reason finds out that you won $599 (or $59 for that matter), they can come after you for the taxes due on that amount, plus penalties, interest, and whatever else they want to tack on.

Yeah, I know .... it ain't fair!

BTW, I've been lurking for a while, and enjoying the repartee. This is my first post.

Thanks to everybody for all the really useful links!

Nora

 

[nicolep91]

Welcome to DIS, Nora!

Glad to have you with us!

And I'm so glad you finally received your package, Sue. Have fun with all of your stuff!

 

[tonyk]

I read somewhere (quite a while ago, so I don't recall many details) that you could dispute the value the company placed on the 1099 for the prize. I think the discussion revolved around winning a new car and the value stated was sticker price which No One pays so the car wasn't really "worth" that.

You would probably have to detail what was actually received and the fair market/retail value for each thing. Kinda makes sense since the IRS uses similar guidelines for the donations/deductions you make. They can dispute that the sofa you donated wasn't really worth $3000 so why can't you dispute the value of the prize package!

Anyway, I really don't know anything about anything, so don't listen to me I am not a tax expert and do not play one on TV.