We are a non-profit foundation to support a state university. We often pay vendors for items (gifts/awards) that are given to students or alumni. We normally collect W9 information from recipients who receive items in exess of $75, but don't report it because we have yet to have anyone receive items totalling $600 or more in a calendar year. Just last week, we have had three items in excess of $600 each that have been given as gifts/awards and we are not sure how to handle them.
One is a crystal that has been purchased from and engraved by a local jeweler and was presented to a student who won a poetry contest. The total cost of the crystal was $1,000.
The other two items were medals which were presented to alumni. The base cost of the medals was $405 each, but there was also a die charge for the personalization and shipping charges. The total invoice was $1,499.50 (or $749.75 each).
We have been told by the AP department at the university that these types of awards (plaques, medals, trophies, etc.) should not result in a 1099 being issued because they are personalized and do not have a fair market value. Is that correct, or should we issue 1099-MISC's for the cost of these awards?
Also, we have gotten conflicting information regarding sending 1099-MISC forms to donors who are given appreciation gifts. If we give a donor an appreciation gift in excess of $600 (i.e. - football tickets), would that be something we would report on a 1099? We have always assumed that this is reportable, but have recently been told by another consulting firm that we should never send a 1099 to a donor.
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