Discussion:Other Income

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Mpfllc (talk|edits) said:

24 November 2005
Have a client who won a classic car through a radio station contest. The radio station has told her she needs to file a "Gift Tax" return and I believe they are wrong. Should she not just receive a 1099 that would be shown as other income on the return? Thanks, Matt

Rlw (talk|edits) said:

24 November 2005
I agree that "gift tax" is wrong. But it may be the station's way of telling your client she will not receive a 1099.

Contest prizes are just "other income" on the return.

Jamshed (talk|edits) said:

25 November 2005
I agree. Contest prizes are not "Gifts" and are not to be reported as gifts. They would be income to the recepient

Knafels (talk|edits) said:

November 25, 2005
I have seen several 1099-MISC sent out to clients by radio station s for prizes won. They have reported it as other income. So it would be taxable.

MEJungman (talk|edits) said:

26 November 2005
IRS Publication 525 says:
Prizes and awards. If you win a prize in a lucky number drawing, television or radio quiz program, beauty contest, or other event, you must include it in your income. For example, if you win a $50 prize in a photography contest, you must report this income on Form 1040, line 21. If you refuse to accept a prize, do not include its value in your income.
Prizes and awards in goods or services must be included in your income at their fair market value.

Line 21 is for "other income".

DZCPA (talk|edits) said:

14 December 2005
Fair market value is often lower than the 1099 amount as reported. I show total 1099 amount and the on next line back out the excess by stating " excess value of 1099 above over FMV"

Solomon (talk|edits) said:

14 December 2005
They are good at over stating the value so they then will have a larger tax deduction.

Nancyshoemake (talk|edits) said:

27 January 2008
I have a client that owns an airplane and rents a hangar. All of the airplane owners were placed in a draw and my client won the "rights" to build a hangar on the land. Since the land is government owned, they can not own the land but can place a hangar on "rented land". Another airplane owner has paid my client $10,000 to have this "right". I am assuming this is taxable income.....but can anyone help me out regarding where it is placed. This is not a gift, it is not earned income.....what would this be classified as?

Thanks so much

Nancyshoemake (talk|edits) said:

27 January 2008
I have a client that owns an airplane and rents a hangar. All of the airplane owners were placed in a draw and my client won the "rights" to build a hangar on the land. Since the land is government owned, they can not own the land but can place a hangar on "rented land". Another airplane owner has paid my client $10,000 to have this "right". I am assuming this is taxable income.....but can anyone help me out regarding where it is placed. This is not a gift, it is not earned income.....what would this be classified as?

Thanks so much

Death&Taxes (talk|edits) said:

27 January 2008
You might type 'Sale of Rights' into the search block. I see three interesting discussions but am not sure if any apply here. Yet read Riley on the one.

PostingFromWork (talk|edits) said:

27 January 2008
If the right was transferred entirely and permanently, I'm going to say capital gain, as long as the holding period was met.
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