For the larger items, yes. I believe the threshold is $600 -- below that, the company doesn't have to report anything to the IRS. But, I'll only pay taxes on the actual value -- the two trips I won last year originally were valued at $8000, but they ended up being a little over $2K each, so the tax burden was smaller.
The cruise will be taxed in the year that I take it, and they're knocking an additional $1K off the price of the stateroom, so my tax burden will be $2K and the value will be $3K.
All told, though, the amount we pay in taxes is far less than we could have done the same trip on our own, so it's worth it. I have the option of turning down any prize as well, so there's no automatic obligation.
no subject
The cruise will be taxed in the year that I take it, and they're knocking an additional $1K off the price of the stateroom, so my tax burden will be $2K and the value will be $3K.
All told, though, the amount we pay in taxes is far less than we could have done the same trip on our own, so it's worth it. I have the option of turning down any prize as well, so there's no automatic obligation.