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Contest prizes are taxable income

 
Published March 26, 2002|Updated Sept. 2, 2005

Question: Are prizes from contests taxable? My wife won a contest for a trip to New York in 2001 from a local radio station. We never received a Form 1099 for miscellaneous income from the station, as required by law, if indeed this is considered taxable income.

Answer: If you win a prize in a lucky number drawing, television or radio quiz program, beauty contest or other event, you must include it in your income, said Internal Revenue Service spokesman Mark Green.

If the prize provider fails to give you a copy of your Form 1099 MISC., Green recommended calling IRS at 1-800-829-1040 so a representative can take your complaint.

North-bin Laden hoax

Question: I have received an e-mail twice recently claiming that a video clip showed Oliver North testifying during the 1987 Iran-Contra congressional hearings that Osama bin Laden was a terrorist who should be assassinated. According to the e-mail, his questioner, then-Sen. Al Gore, D-Tenn., was dubious and disagreed. Can you verify if this happened?

Answer: You're right to be skeptical. It's not true, but that isn't likely to stop people from forwarding it _ as they have been doing for months.

Here's a good online resource to check e-mails like this that you suspect are partly or completely false or misleading: the Urban Legends Reference Pages at www.snopes2.com. All you need to do is enter a few search terms (in this case, Osama bin Laden Al Gore).

North himself has posted a response to the e-mail in question. In brief, North said the terrorist he mentioned in testimony was Abu Nidal, not Osama bin Laden. And, North continued, it was the committee counsel, John Nields, who was doing the questioning, not a senator.

"Though I would like to claim the gift of prophesy, I don't have it," North added, signing the message, "Semper Fidelis," followed by his name. It's dated Nov. 28, 2001.

Buying "Patriot Bonds'

Question: Sometime after Sept. 11, it was reported that the government would issue some kind of savings bonds or war bonds to help finance the war on terrorism. I haven't heard any more about it. Is it still in the works?

Answer: The Treasury Department began issuing Series EE savings bonds designated as "Patriot Bonds" on Dec. 11.

Although the money invested doesn't go into a special government account, the funds raised by the bonds will contribute to the federal government's overall effort to fight the war on global terrorism, according to the agency.

Series EE savings bonds sold through financial institutions are inscribed with the legend "Patriot Bond." The legend also will appear on Series EE bonds available at the Bureau of Public Debt's Savings Bonds Direct Web site, www.savingsbonds.gov.

The Series EE savings bonds earn 90 percent of five-year Treasury securities yields. The current rate, in effect through April, is 4.07 percent. The bonds sell as half face value and are available in denominations of $50 to $10,000.

The bonds increase in value monthly, and interest is compounded semiannually. Interest is exempt from state and local income taxes, and federal tax can be deferred until the bond is redeemed or it stops earning interest after 30 years. Bonds can be redeemed any time after six months. A three-month interest penalty is applied to bonds redeemed before five years.

Online: www.savingsbonds. gov/sav/savpatriotbond.htm.

No bans on home smoking

Question: A usually well-informed friend tells me that three states have passed laws banning smoking indoors, including in one's own home. What are those states?

Answer: Your friend is misinformed, according to John Banzhaf, executive director of Action on Smoking and Health, a legal-action antismoking organization in Washington, D.C. He said he isn't aware of any state, county, city or other jurisdiction that bans smoking in private homes.

And, he added, ASH "is more on top of such issues" than any other organization in the United States.

Banzhaf did say, however, that there have been child custody cases in which the court would consider smoking in a household as a factor in denying custody if the child involved is allergic to smoke. He also said there have been cases in a dozen or more states in which the court has sided with nonsmokers who live in apartments where smoke seeps through the ventilation system or under the door from other apartments.

Those cases, he emphasized, are "highly individual."

ASH posts information online at www.ash.org about smoking and nonsmokers' rights, smoking statistics, quitting smoking, smoking risks and other related concerns.

Seven wonders lists

Question: What are the Seven Wonders of the World? I've heard people say the Grand Canyon is the eighth. Is this true?

Answer: There are two "Seven Wonders" lists: Seven Natural Wonders of the World, and Seven Wonders of the Ancient World.

As World Book Encyclopedia explains, the natural wonders list is acknowledged by "a majority of earth scientists." It includes the Grand Canyon in northwestern Arizona; Mount Everest on the border of Nepal and Tibet; Ayers Rock or Uluru, in Australia; the Matterhorn, whose base is in Switzerland and Italy; Victoria Falls on the Zambezi River in southern Africa, between Zimbabwe and Zambia; Meteor (also known as Barringer) Crater, near Winslow, Ariz.; and the Great Barrier Reef off the coast of Australia.

The ancient wonders is a listing of notable objects built between about 3000 B.C. and A.D. 476. Although there are several lists, World Book says these are the most commonly included: the pyramids of Egypt at Giza; the Hanging Gardens of Babylon near modern Baghdad, Iraq; the Temple of Artemis in the Greek city of Ephesus on the west coast of what is now Turkey; the statue of Zeus at Olympia, Greece; the Mausoleum at Halicarnassus in what is now southwestern Turkey; the Colossus of Rhodes near the harbor of Rhodes, an island in the Aegean Sea; and the Lighthouse of Alexandria on the island of Pharos in the harbor of Alexandria, Egypt.

Take your child to work

Question: When is Take Your Child to Work Day this year? I have been unable to find out.

Answer: It's usually on the fourth Thursday of April: April 25 this year.

Ditto for the Ms. Foundation's Take Our Daughters to Work Day.

A palace history

Question: What can you tell us about Kensington Palace in London? I thought Princess Diana lived there, but after Princess Margaret died, I heard that it was her residence. A little history, please.

Answer: William III bought the Jacobean mansion originally known as Nottingham House in 1689 and commissioned Christopher Wren to extend and improve it, which included construction of royal apartments for the king and queen.

Until the death of George II in 1760, Kensington Palace was the favorite residence of successive sovereigns. Queen Victoria was born and brought up at Kensington, and Queen Mary (grandmother of the current queen) was born there in 1867.

Kensington today contains the offices and London residences of Princess Alice, duchess of Gloucester; her son, the duke of Gloucester, and his wife, also the duchess of Gloucester; the duke and duchess of Kent; and Prince and Princess Michael of Kent. Princess Margaret and Princess Diana used to live in Kensington Palace and had their offices there.

Historic parts of Kensington Palace are open to the public. Detailed information online: www.royal.gov.uk.