At a fundraising auction held by my childrens? Catholic school, I won
a cruise in a raffle.  The prize is a 10 day cruise for two people on
Holland America lines.  I?m trying to determine the fair market value
on which I should pay income tax.  I have two pieces of data.  1)  On
the day that I booked my travel, the Holland America web site offered
the same itinerary and cabin class for $2540.  I printed this out.  2)
 I inquired at the school, and learned that they (the school) paid
Holland America $700 for the cruise certificate.  The school asked for
a donation, and Holland America responded that they don?t do
donations, but the school could purchase a ?Charity Cruise
Certificate?.   I have photocopies of the documentation.  I did not
receive any form 1099 or similar document from the school for the
raffle prize.

Question:  Could I safely use the $700 figure, based on that fact of
the school?s payment for the cruise certificate?  If I pay taxes on
$700, and later the IRS audits me and determines some higher value, am
I liable to face a penalty larger than the increased tax plus
interest?

I would thing if you got a copy of the original recipt then that would
be good enough for your tax purposes stating that it only cost
$700.00.

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