Social Media Influencer "Gifts" of Merchandise

[Bilgerat]

How are you dealing with merchandise sent to social media posters?  Sometimes the posters will make a photo with the merch, other times the merch just shows up with a request to post or by email.  Still other times, the merch just shows up in the mail and nothing is done by the poster.  Most of these are young people doing instagram type postings.  Are you putting these on a schedule C with estimated fair value of the item? 

[dascpa]

If they're in the business of doing this, then yes.  Sometimes the problem is the FMV of what was received if no 1099 was issued.  Long before the 1099's my wife (as a teen) was on The Price Is Right.  They gave her a few thousand dollars worth of junk (car wax, a sunroof for a generic car, cleaning products, etc.).  No 1099 and no value.  Hence why people on game shows are allowed to deny the products they win and take the cash (but you don't see that part on tv).

[TaxGuyBill]

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@dascpa wrote:

Sometimes the problem is the FMV of what was received if no 1099 was issued.  Long before the 1099's my wife (as a teen) was on The Price Is Right.  They gave her a few thousand dollars worth of junk (car wax, a sunroof for a generic car, cleaning products, etc.).  No 1099 and no value. 

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But didn't she need to guess the retail price to win those?  😂

[Bilgerat]

Yes, that's one of the hard things about this.  Apparently, you would need to go out to the retailers' site and find the items' selling price.  Make some kind of guess about the FMV and put it on a sched C.  So, you end up with income not in the form of cash and no wherewithal to pay the tax.

[taxes96786]

It is your client's responsibility to provide you with the information you need to complete an accurate return. Don't let them push this off onto you.

[shiloh1005]

Did you ever figure this out? How do you handle it now?