A competition winner must pay tax on the prize. A teenager was awarded a car for good grades and attendance. Her school had entered her in a local car dealership’s competition, along with other qualifying students. Her name was then pulled in a drawing. She asserted that the car was a gift and should be excluded from taxable income. However, the IRS argued that she’d received the car as a prize and, thus, its fair market value was taxable income to her. The U.S. Tax Court agreed, noting that the tax code makes clear that gross income includes property received as a prize or award. So, she couldn’t exclude the car’s value from her income as a gift. (Docket No. 13969-18)Visit our website for more information!  www.mjscpa.com/news/