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Event Value vs Cash Value

Posted by Trackin01 
Event Value vs Cash Value
November 21, 2011 01:13PM
This topic might have been touched on long before I came along, but I need to know.

I just finished hosting my NPC Last Chance Qualifier PDGA B-Tier and had good conversations with some touring pro's and the PDGA office about results.
#1 Do we post the amateur value?
#2 Do we add side items: ace pot, players packs, ctp's, etc . . . ??

The same answer came up from both the touring pro's and PDGA office. Cash only from the professional divisions are recommended for results. Why? Because in the end, these players are to claim their winnings to the IRS.
Then I was told that Ken Climo was recently hit with a big one! The IRS Came after him for back taxes. All they have to do is look on the PDGA website and see what is posted as earned money under his name.
That is why its recommended to add just the cash won in Pro's only, cause the Amateurs only win Merchandise.

I wonder if it will ever hit SN Money leaders? We add everything and anything that has value to our results, which of course boost the event value $$$ on paper. It does show a huge value, but not cash only.

I am and probably never will be in this boat of earning $10,000+ a year and would least likely be on the radar, but is posting everything merchandise value and cash value a good thing to the player in terms of taxes?

Just a thought question.
Re: Event Value vs Cash Value
November 21, 2011 04:21PM
I have wondered this before myself.
Anonymous User
Re: Event Value vs Cash Value
November 21, 2011 08:46PM
I'm fairly certain the IRS can't come after anyone who earns less than $600 at a single tournament.
Re: Event Value vs Cash Value
November 21, 2011 09:06PM
Here are a couple of things to consider:

An IRS auditor can be presented with the value of the items received and must take that into consideration during the audit. If the person can account for the value of the items received, the auditor may pass the return as acceptable or pursue further questions, such as the retail value, resale value, or actual cost of the items (to the tournament).

Merchandise winnings can be considered as income if they have a monetary value and are not disposed of at sale (in which case the sales price of the item less cost and expenses = income)

That being said, unless you are really making some serious money off the winnings and the merch, they probably are not going to pursue it too hard.
Re: Event Value vs Cash Value
November 21, 2011 10:01PM
Quote

I'm fairly certain the IRS can't come after anyone who earns less than $600 at a single tournament.

I think the $600 rule is when the PDGA/TD is required to report to the IRS, not when the IRS is allowed to come after you. In theory, the IRS can come after any amount of taxes you don't pay, but it is extremely unlikely. Also, if it is classified as winnings, I think that the 10,000 a year may be the mark anyway, and the first 10k isn't taxed.
Re: Event Value vs Cash Value
November 21, 2011 10:10PM
curt is correct
Re: Event Value vs Cash Value
November 21, 2011 10:21PM
A TD is required to supply a 1099 to players they paid out at least $600 total during the year, even if it was winnings from more than one event with no single event exceeding $600.
Re: Event Value vs Cash Value
November 21, 2011 10:33PM
cgkdisc Wrote:
-------------------------------------------------------
> A TD is required to supply a 1099 to players they
> paid out at least $600 total during the year, even
> if it was winnings from more than one event with
> no single event exceeding $600.

Regardless if it's merchandise or not? How does that factor in? When you add event value to the mix, a players stats can show a greater increase of what he actually received in cash.
Re: Event Value vs Cash Value
November 22, 2011 09:05AM
I believe merch value gets included. Game shows started adding some cash to their merch prizes because so many people in the past were getting nailed by income taxes owed on the value of the cars and vacations they won.
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