Caesars Rewards - won the NCL sweepstakes - Is it normal to fill W-9 and send ?

[game4lover]

I got an email from Caesars Rewards that I won sweepstakes for NCL cruise.  And I am asked for W-9 form.

 

Is this normal ?

 

Thanks in Advance !

[shof515]

yes normal

[MoCruiseFan]

Any winnings of any amount by a US citizen is subject to federal (and in most cases) state income taxes.  The entity running the contest will send the winner a W-9 at year end if the value of the winnings are over a certain amount or (typically in the case of a casino) the odds of winning are above a certain threshold. .  The winner does not provide the W-9.  The winner may be request for SSN, etc so that the other party can properly fill out the W-9 at the end of the year.

NOTE getting or not getting a W-9 has zero impact on the requirement for the winner to list the winning on the current years tax forms.  However most people will not list non w-9 winning especially of minimal amounts.

NOTE: Total gambling losses can be claimed up to the amount of total gambling winnings each year (no rollover) which is why people normally do not claim minimal winnings even though by tax law they are required to do so.

[game4lover]

thank you both !

 

Its supposed to be a 7 day NCL cruise.  This would be my first time. I always cruised on carnival.

 

Need to check what options they give me.

[StolidCruiser]

3 hours ago, MoCruiseFan said:

Any winnings of any amount by a US citizen is subject to federal (and in most cases) state income taxes.  The entity running the contest will send the winner a W-9 at year end if the value of the winnings are over a certain amount or (typically in the case of a casino) the odds of winning are above a certain threshold. .  The winner does not provide the W-9.  The winner may be request for SSN, etc so that the other party can properly fill out the W-9 at the end of the year.

NOTE getting or not getting a W-9 has zero impact on the requirement for the winner to list the winning on the current years tax forms.  However most people will not list non w-9 winning especially of minimal amounts.

NOTE: Total gambling losses can be claimed up to the amount of total gambling winnings each year (no rollover) which is why people normally do not claim minimal winnings even though by tax law they are required to do so.

 

That’s not correct.  The taxpayer completes the W—9 and provides it to the entity who would be disbursing the prize (not the other way around).  This is the mechanism for the disbursing entity to collect the taxpayer’s identifying information. 

 

The taxpayer will likely receive a 1099-MISC for the value of the prize from the disbursing entity.

 

Right theory, wrong forms. 😀

 

[UKstages]

the amount listed on the 1099-MISC will likely be the full retail value of the cruise. 

 

tip: go online and make a mock booking to see what the actual value of your cruise is. it will probably be far less, with the various discounts and inclusions, than the rack rate. document this, in case you have to fight the IRS on the taxable value.

[auie2]

You can try but the full retail vaule is what you will pay taxes on. My mom won a trip and she could have gotten the same trip for half the cost. she tried to fight to no avail.

 

David

[UKstages]

12 minutes ago, auie2 said:

You can try but the full retail vaule is what you will pay taxes on. My mom won a trip and she could have gotten the same trip for half the cost. she tried to fight to no avail.

 

i know of three people who have successfully fought 1099-MISC valuations for casino prizes.

 

(two of these folks have also successfully claimed gambling losses against 1099-MISC valuations by saying that the only reason they were eligible for and won a particular casino prize was because they gambled.)

 

your mileage - and your mom's - may vary.

 

the key for all of this is the quality of the documentation and the compelling case one makes. the first step is to fight the valuation with the issuer of the 1099. rarely will they agree to revise the valuation.  but that's not why you go them first. when you go to the IRS, the first document you provide is your correspondence showing that you tried to deal directly with the issuer. that's why you go to them first.    then you show whatever proof you have that the valuation is too high. it might seem imposing, it might seem cumbersome, but it often works, if your documentation is good.

 

you can't simply say this isn't the real price. you have to definitively demonstrate in a "letter of explanation" what the fair market value of the prize was when you received it by showing the exact same prize (not a comparable one) at a lower price. this happens all the time with game show contestants who win cars and boats and appliances. people who are awarded frequent flyer miles for checking accounts also have successfully fought 1099 valuations.

 

in the case of a cruise, make a mock booking on the NCL website; make a mock booking on a travel website; get a quote from a travel agent. the more documentation you can provide, the better your chances of successfully fighting the valuation.

 

people revise the tax basis for the reported income on 1099-MISC forms all the time!

 

the day you take possession of the prize is very important... the price or value on that day is what constitutes fair market value, so don't delay in getting competitive quotes.