Our golf tournament club takes in entry fees and dues from members for about 25 tournaments per year. We also make payouts to winning players.
But we are questioning how to treat tournament prizes. Some have suggested that tournament prizes should be considered a refund of entry fees, effectively reducing our revenue instead of increasing our expenses. The intended effect is to eliminate 1099 reporting for our members since, on the year, payout money never exceeds fee income.
Is this accounting treatment common or would it be way out there?
