How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Tax.appeal.168 Your Own Question
Tax.appeal.168
Tax.appeal.168, Tax Accountant
Category: Tax
Satisfied Customers: 3444
Experience:  3+ decades of varied tax industry exp. Tax Biz owner
58285678
Type Your Tax Question Here...
Tax.appeal.168 is online now
A new question is answered every 9 seconds

I won a car in a raffle. They claim they sent in a 1099

Customer Question

I won a car in a raffle. They claim they sent in a 1099 stating the car is worth 9.000 dollars the IRS. The blue book valve is 4700 I have tried to sell the car for 4 months now. The highest bidder is 2800. How can I pay taxes in a car that is not worth the amount on the blue book valve. This car is a 1963 Studebaker. I called my tax consultant and she thinks I a screwed, I will have to pay more takes then what I sell the car for, Some how this isnt right. Is there anything I can do? The owners of the car paid 4700 for it in 2014. and Did nothing but general maintenance on it over the year before he raffled it off.
Submitted: 1 year ago.
Category: Tax
Expert:  Tax.appeal.168 replied 1 year ago.

So basically the FMV of the vehicle was nearly doubled on the 1099-Misc? If you can't get the issuer to issue a 1099-Misc that reflects the correct amount, what you can do is to report the amount of the FMV of the vehicle at the time of receipt on your tax return. You can also disclosure that there is an issue with the actual FMV value of the vehicle. You will do this by using an IRS Disclosure form, which is Form 8275. A rather simple form to complete. Indicate that the 1099 was reported for $9,000, however, the actual FMV of the vehicle is whatever amount was $4,700. Include a copy of the 1099-Misc, as well as something that shows the FMV of the car at the time that you won it with the Form 8275.

Link to Form 8275/instructions:

https://www.irs.gov/pub/irs-access/f8275_accessible.pdf

https://www.irs.gov/pub/irs-pdf/i8275.pdf

The IRS will make a determination as to the amount that you will need to pay tax on. Let me know if you require further assistance with this matter.

Related Tax Questions