The article linked to by sbunny8 suggests that you can challenge the valuation attached to the prize. The author won a five-day trip to Rome, valued at $7,000 but he checked prices for airfare and a hotel on Expedia and used those prices for the valuation.
That could be a new rule. My dad won sweepstakes prizes, including cars and furniture, and had to live wih the valuation given by the provider. But he’s been dead about a dozen years, so maybe rules have changed.
Did your father even try to challenge the valuations? I think most people just accept whatever value is given by the game show.
He contacted the IRS about it and that’s what they told him.
Not a game show, but we met someone who won a car as the millionth attendee at Disney. They gave him a certificate for the car which could be redeemed at his nearest dealer.
I won a week at a resort when I was on Jeopardy. I think I had the option to take it in cash, but I don’t remember exactly. What I do remember is that it came with transportation. However the resort was about 60 miles from my house, so I’d have to drive further to fly there than drive there, not counting the cost of a rental car. I still had to pay tax on the transportation voucher, even though I didn’t use it, but it wasn’t that much.
You also get junky sponsor donated gifts. No tax on them.