Rev. Rul. 68-457

A taxpayer won a prize of substantial value in a national contest that he entered by doing nothing more than placing on an entry blank his name and address and the identity of the store where he obtained the entry blank.

Held, the fair market value of the prize, although subject to Federal income tax, is not wagering income within the meaning of section 1302(b)(3) of the Internal Revenue Code of 1954. Held further , for the purpose of computing Federal income tax for the year in which the taxpayer won the prize he may average this income if he elects the benefits of the income averaging provisions of section 1301 through 1305 of the Code and is otherwise qualified for the benefits of income averaging.