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If you win a "lifetime membership" prize, do you pay an income tax on it year after year?

Forum|Forum|4 years ago
June 11, 2021
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Not A Product Question

Best answer by rjs

No. You only pay tax in the year that you win the prize. The amount of income that you report and pay tax on is the amount it would cost to purchase a lifetime membership.

rjsAnswer

Employee

No. You only pay tax in the year that you win the prize. The amount of income that you report and pay tax on is the amount it would cost to purchase a lifetime membership.

J

JustinIsMyUsernameAuthor

Sorry, I should have been more clear. The product under normal circumstances has a yearly subscription cost of $200. There's no way to actual purchase a lifetime membership-- only win it. Does this change anything? Thanks.

rjs

Employee

Is the company or organization that gave you the prize going to issue a Form 1099-MISC (or a W-2G)? If so, you just report the amount that they put on the form.