I am not a lawyer. When it comes to tax law, even lawyers don't do perfectly. Heck, even the IRS messes up often.
I looked this up a bit when the 1 billionth app came around (I was curious), and then I looked some more when I saw this thread. Go look at
http://books.google.com/books?id=Y3...tqzAw#v=onepage&q=tax court car prize&f=false (page 74).
In the US, Apple gives its valuation to the IRS on a form 1099, and you can suggest your value with an amended 1099. The famous target for this is the Price is Right; they are notorious for quoting Suggested Retail Prices that are double to triple (or more) actual retail. The standard suggestion is documenting multiple stores that sell the item, and then taking an average (or, at worst, the highest) and calling that retail value. For items that can be sold new by customers (pianos, etc.), the tax courts will sometimes accept a resale value that was derived honestly (no selling to cousin Luigi) and accurately reflects the marketplace. Some tax courts also accept wholesale price as taxable value, but that's a lot more spotty.
I would suggest finding a couple of discounters like Sams Club that regularly cut 5 - 10% off iTunes card retail prices, and then use that to cut the equivalent amount off of the retail price of the $10k prize.
I first agreed that you shouldn't be able to be taxed if you can't resell the item, but that argument has rarely flown in tax court. They go with retail value; if you get $10k in iTunes credit, it's taxable because it would have cost you around $10k to buy that much iTunes credit, even if you then can't sell/transfer it.
