I can't find a nominee section in the 1099-Misc interview.
Using the fair market value adjustment will be the easiest way but might invite IRS scrutiny, since the adjustment is so large (percentage wise).
As maglib suggested, the proper way to do it is with a nominee adjustment. Enter the 1099-Misc, at the 1099-Misc screen in TurboTax and include the full $675. TT will put the income on line 21 of form 1040, as gambling winnings
Then enter a line 21 deduction, for $325. In TurboTax (TT), enter at:
- Federal Taxes tab
- Wages & Income
Scroll down to:
-Less Common Income
-Misc Income, 1099-A, 1099-C
- On the next screen, choose – Other reportable income - Enter the number with a minus sign (-) in front. At description, enter nominee adjustment to prize income
