I have -zero- interest in sports (including the Olympics), and while it would be cool to attend the festivities just for fun, for $10K I could take 5 trips to places I actually want to visit. So for me it would be a very easy decision to turn this prize down.

That said, I've never won anything, so ask me again after I have!

OP, is it possible to refuse everything except for the plane tickets and hotel? A 5-day, 4-night trip to London isn't exactly cheap these days.

In answer to questions.

1. I entered the contest because I thought it would be intriguing to go to the Olympics. I never imagined I'd win first prize, nor that it would be valued at $35,000.


2. My question too is whether there is some way to get it down from $35,000 by attending lesser events. but I don't yet know the answer

This brings up a pretty obvious but still important point. There are many contests out there where the taxes due on the prize are more than the prize itself is worth (to the individual in question). This is especially true of prizes involving airfare where the value of the ticket is often inflated.

Just don't enter those.

To OP, I suppose you can try speaking with the contest sponsor and see if they are willing to help out. Maybe they'll reduce the ARV of the prize or break out the travel portion from the Olympics part (maybe they could donate the tickets to some worthy cause). Doubt they would, though, and as I said earlier, the value of the airfare itself might be grossly inflated.

You can also dispute the value of the gift on your returns but there are no guarantees and, in the end, the prize may not be worth the cost.

If they are giving this to you and expect you to pay taxes, then they can't really prevent you from selling the tickets, since once gifted they are yours.

This assumes they will give you the paper tickets and not have someone waiting to get you into the events.

I would be tempted to take the trip to London, see a few of the lower priced events, and sell the high priced tickets to cover the tax liability.

It would be a lot of fun to have the VIP tickets and access. I'm not a sports fan. However, to pay $10,000 (taxes) for four days in London including COACH airfare isn't something I'd do. One suspect that the hotel arrangement is similarly in the no frills category. OTOH, to have everything arranged, including transportation to events, would be very nice.

Try negotiating with the sponsor. They might not realize the implications of the tax bill for the winner. You might also prefer some free time in London for relaxing or other activities, despite the Olympic hype and crowds.

To echo some previous comments, why did you enter if you're not an Olympics fan? I hope you were advised of the tax liability early.

If you received your tickets in London, for a sporting event outside the US, how could they still tax you on it?

I would imagine all they would be able to tax you would be your flights too and from the US no?

I believe US folk need to pay taxes on am worldwide income, so the 'where' doesn't matter.

OP - speak to the sponsors, see what they say. Then you know for sure,

Yeah, the cost of holding a USA passport, even if a dual national, is being taxed on worldwide income.

I've actually done that with the one and only travel prize I ever won in my entire life and in my case, the supplier did 1099 me for the actual value (which I fully documented with proof of what the trip would cost had I booked it myself) rather than the supposed retail value.

Check with the people you won the prize from to see if they will work with you.

That sounds like an amazing prize and I would love to go to the Olympics but for $10,000 in taxes I'd definitely have to think long and hard about what to do. That is an extremely expensive trip to London!
As much as I would love to attend the Olympics I would find it hard to swallow spending so much on the taxes. That free prize in the end would be very pricey.

The hotel is a Marriott County Court. Very nice. Nothing about the trip is cheap.

In fact I am trying to talk to the contest sponsor to see if by either accepting fewer event tickets, or lesser seating to events, it can be reduced.

But as someone above noted. The IRS considers anything of value to be income. And tickets or hotels in London are considered income. I called the IRS Friday and specifically asked that question. As long as I'm a U.S. citizen, it's my income if I accept it.

I'm leaning toward not accepting it. I had been planning a trip to South Africa and I could do a heck of a three week trip for considerably less than even half the $10,000 tax bite--AND buy a needed washer and dryer

It's hot, there's overbearing "security", you'll take a big tax hit, and you're not all that interested in the event.

I'd stay home. @:-)

It's been anything BUT hot in London this summer so far!

So far... ;)

But you're right, it has been uncharacteristically cool.

They are now saying the cost will be less than $20,000, which means the tax drops to $6,500. It's still a lot of money for a five day trip