We have a Health Foundation who held a fundraiser and the grand prize was a motorcycle valued at $6,900. The prize was donated by the motorcycle dealer. The foundation is awarding the prize to the individual. What are our tax reporting requirements?

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Prizes are reportable. While the individual is responsible for listing the prize on her/his income tax, the point of the 1099 is to assist the IRS in identifying under/non-reported income by not relying on the individual alone. The impact on your books is immaterial in this context.

Your organization should issue a 1099 to the winner of the prize. See the IRS Instructions for Form 1099-MISC. We confirmed this with IRS information reporting agent Ms. Walker (ID 1006467).

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