topic Fair market value on a cash prize when the payer paid the income tax for me in Get your taxes done using TurboTax

Fair market value on a cash prize when the payer paid the income tax for me

Kim678height — Tue, 31 Mar 2020 22:05:19 GMT

Can you tell me how I should figure the fair market value of my daughter's $1000 gift card prize she received? The store that gave it to her also paid her income tax. Her 1099-misc states $1250 of other income and Fed income tax withheld of $250. The Turbo Tax program states that the FMV of the award might be less than what is printed on the 1099-misc. It further instructs me to "Enter the difference between the FMV of the prize received and the amounts listed on the 1099-misc. If none, leave it blank." The system already had me enter the income amounts ($1250) and the Fed tax withholding amount ($250) as recorded on the 1099-misc. Do I make a FMV adjustment of $250 in that section or do I leave it blank? In other words, Is the fair market value of her prize $1000 or $1250?

Many thanks to anyone who could answer this for me,

Kim

Re: Fair market value on a cash prize when the payer paid the income tax for me

ReginaM — Tue, 31 Mar 2020 22:38:06 GMT

No, do not make a Fair Market Value Adjustment for your daughters gift. The Fair Market Value of the gift is $1,250. (The Prize of $1,000 + the payment of Taxes of $250 = $1,250 The Total Value of Gift Received).

Re: Fair market value on a cash prize when the payer paid the income tax for me

Kim678height — Wed, 01 Apr 2020 01:34:02 GMT

Thanks a bunch!