claiming prize on taxes, no 1099MISC, part of prize was extended until next year

[amgk]

I have a rather peculiar situation and could use some help. I won a large sweepstakes prize in 2021 that included two prize components: airmiles and a free trip. I received the airmiles, but due to the pandemic we were not able to take the trip in 2021. The company agreed to extend the deadline for the trip to 2022 instead. 

I have not received a 1099MISC or a W2-G. All I have is the estimated retail value of the total prize ($15,470) from the rules, and an email from the company breaking down the cost into two parts: $11,200 - miles, and $4270 - trip. I was told by the company that I *would* receive a 1099MISC, so I am confused about why I have not done so. It is a major US airline. My guess is that I still need to file taxes on this amount as income, but I am unsure about how to do so. Specifically, my question is as follows:

Given that the company extended the trip to 2022, would we just list the $11,200 for the miles on our tax return and then wait until 2022 to list the $4270 (or actual value when we have taken the trip and can provide documentation)? That seems reasonable given the way we are receiving the prize, but I don't want to do anything wrong. 

I would very much appreciate any advice. Thank you!

[DaveF1006]

Yes, this is a peculiar situation where the IRS does not offer clear guidance. As a tax professional, I would advise reporting the $11,200 this year as taxable income and defer the trip until you are able to take advantage of the benefit, since they haven't released it to you yet.

Before you do anything though, I would suggest trying to contact the airline to see if a 1099-MISC will be issued for the airmiles. Here is how you should report the airmiles.

• Click Federal > Wages & Income>all income>
• Go to the last selection, Miscellaneous Income and click Start
• Go to the last option, Other reportable income and click Start
• When it asks, "Any other reportable income?" say yes and then type in a description and the amount to report it on your tax return.
• For the description, record airmiles awarded by airlines, no 1099-MISC, then the amount.
• If you receive a 1099-MISC, you can describe this as 1099-MISC received for airmiles awarded by airlines.  Either way, you are covered because you reported the amount of the airmiles received as taxable income.

[amgk]

Thank you so much for this super helpful response! I will contact the airline. If they do, in fact, send us a 1099MISC that reports the entire amount (for airmiles and trip), do you still think we would be able to reasonably only claim the $11,200 this year as taxable income and defer the remaining $$ to 2022? I worry about a discrepancy between our records and those received by the IRS, but I want to do this correctly. (Also, we will not actually be able to take the trip, unfortunately, due to the pandemic and an unvaccinated toddler. I presume, though, that we will still need to pay taxes on the trip, regardless of when we do so.)

[JulieS]

It depends on what your 1099-MISC shows. You will need to report the same amount they report or you will get an IRS letter. 

Based on what you said in your first post, I would expect them to report the value of the miles for 2021 and the trip in 2022.