The best way to do this is first show the winnings exactly as they are. So say for example you got a 1099-Misc for $12,000, you would report that and it would show up on line 21 other income.
Then you determine the Fair Market Value (FMV) of the trip is actually $9,500, or $2,500 less.
You would then show on line 21 of the Form 1040 a negative amount of $2,500 with a explanation like, "game prize adjusted to FMV).
To do this in TurboTax go to Other Income in the income catagory all the way to the bottom and click on the last one, then next screen same thing and you will get to this area.
Note: You need to have documentation in your tax records (don't send with returnb) as to how the FMV was arrived at, as it may get looked at.
