TAXATION-FEDERAL INCOME TAX-AUTOMOBILE RECEIVED AS PRIZE IN SALES AGENCY DRAWING NOT INCOME

An automobile agency, as a means of publicizing its new models, advertised that it would give a new car to one of the persons visiting its showroom on a certain day. When plaintiff visited the showroom on the day specified, an employee of the agency took her name, wrote it on a slip of paper, and deposited it in a barrel. Plaintiff\u27s name was drawn from the barrel and she received the automobile. Plaintiff did not include the value of the prize in computing her gross income for tax purposes, and a deficiency was assessed against her. Unsuccessful in her claim for a refund, plaintiff brought an action to recover the deficiency assessment. The court held: the automobile was a gift under section 22(b)(3) of the Internal Revenue Code and plaintiff therefore had properly excluded its value in computing her gross income. Bates v. Glenn, (D.C. Ky. 1953) ll4 F. Supp. 445