Your client, Billy Bob Boy is a road construction company owner.

In January 2020 he walked into a donut shop to buy donuts for the weekly company Donut Monday celebration which is held every week to sweeten leaving a boring weekend for a joyous week of work.

At the end of March, he received a letter, along with 156 coupons for 3 dozen donuts a week, that informed him he had won 3 dozen donuts a week for three years.

In August he decided to stop donut Monday as everyone was tired of donuts, and all had gained several pounds.

January 31, 2021 he received a Form 1099 the valued his prize at $6,240.

He has come to you for tax advice.

He still has unused coupons to prove no one used the coupons for donuts after July 31, 2020.

Billy wants to know how much, if any, of the coupon value he should include in his taxes if any and if included what is the amount he must include in each year.

Is there is any way to mitigate his taxes.

Answer rating: 100% (QA)

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