Amount on 1099-MISC for concert ticket prize

[ThisIsSoTaxing]

I received a 1099-MISC for some concert tickets that I won from a radio station.  The amount of $932.83 was much more than I expected it to be for two general admission floor tickets.  I've done some investigation and it appears that the reason the tickets were so expensive is because the radio station bought them second hand from someone who resold them through Ticketmaster.  I've asked the radio station for supporting documentation on the tickets and here's the breakdown:

Tickets: $378 x 2

Order processing fee: $2.95

Servicing fee:  $86.94 x 2

I'd like to see if I can get the radio station to lower the amount reported on the 1099.  My question is, what amount does the radio station have to report on the 1099?  I can still go to the concert venue's website and see that the initial cost of each ticket for that concert was only $129.50.  It seems to me that I should only have to report the "value" of the tickets, not the inflated price that the radio station chose to pay.  I'm also wondering whether the fees the station had to pay should be included.

Any help would be greatly appreciated.

[maxrivers]

$600 sets off the 1099 requirement.

[CryCar2003]

If the amount is over $600, they have to report it all.  If under, they don't have to report it at all.

[BillM223 · Accepted solution]

The "value" of the tickets is what people (and radio stations) would pay for them. According to the IRS, 

"FMV is the price that property would sell for on the open market. It is the price that would be agreed on between a willing buyer and a willing seller, with neither being required to act, and both having reasonable knowledge of the relevant facts."

This is what the radio station has to report on the 1099-MISC.

For whatever reason, the radio station appears to not have purchased the tickets when they were cheaper, but later on the resale market.

Having said that, Fair Market Value (FMV) refers to what the radio station had to pay for the tickets when the station chose to pay for them.

I am assuming that to buy the tickets, you would also need to pay the Servicing fee and the order processing fee. That is, anyone would have to pay these fees, so they are part of the FMV.

If you were to resell these tickets, would the "value" be whatever you and the seller would agree to, not the original sales price.

For background...

See the Instructions for form 1099-MISC: "Also enter in box 3 prizes and awards that are not for services performed. Include the fair market value (FMV) of merchandise won on game shows. "

See page 34 of IRS Pub 525: 

"Winnings from lotteries and raffles are gambling winnings. In addition to cash winnings, you must include in your income the FMV of bonds, cars, houses, and other noncash prizes."

[ThisIsSoTaxing]

Thank you for your very detailed response.  You addressed all of my questions.

[AMcGee2122]

Hello, @BillM223 I have a capital gains question. 

Can I include ticket insurance in the cost basis of the tickets I sold?  The two tickets were originally bought with my money. One for myself and one for another person. We sold the tickets and there was a gain from the sale.  However, the sale money was deposited into their account and then they transferred it to me. They facilitated the sale but we agreed I would get the money. Ultimately who is responsible for reporting the gain on their tax return?

[ShirlynW]

You are both responsible for reporting the gain. One ticket belonged to each of you and both of you received the proceeds. It doesn't matter that the other person received the deposit.