In order to assure PRA does not have to file a W-2G = Report the winnings the ticket price needs to be calculated to be less that 300 times the appraised value of the prize.
If you appraised (by searching and saving a copy of the same model Advertisements) the Dominator at $20K value.
1) the ticket price must be less than $600.
2) The ticket price must be less than 300 times the actual value of the prize.
To not report it. Divide the 20K value by 300 and subtract at least a dollar to calculate the ticket price.
20,000/300 = 66.66666666666667.
Make the ticket price 65.00 or less and PRA does have to report the winner.
The actual code:
Reporting Raffle Prizes
“Raffle” Defined: In general, a raffle is considered a form of lottery. As such, a raffle generally refers to a method for the
distribution of prizes among persons who have paid for a chance to win such prizes, usually determined by the numbers, or
symbols, on tickets drawn.
Generally, an exempt organization must report raffle prizes if (a) the amount paid reduced, at the exempt organization’s option, by
the wager (the amount a person paid for the chance to win a prize), is $600 or more; and (b) the payout is at least 300 times the
amount of the wager. The organization uses Form W-2G for this report.
