eon Graf is your client and is an avid Blue Jackets hockey fan. He goes to a hockey game in January, and there is a drawing for tickets for two for the rest of the games in the season (15 more games). The winner is drawn from all who are in attendance at the game, and Leon wins. Leon already has season tickets, so he decides to give the tickets that he has won to various friends. However, he finds that most of his friends already have tickets, or they cannot go. Therefore, he only uses the tickets for 5 of the games and the rest of the tickets are unused and expire. In January of the next year, Leon receives a Form 1099 reporting that he has an income of $2,250 for the tickets that he won.

Leon is now asking you whether he must report the $2,250 on his tax return for the prior year. If the answer is yes, can he reduce the income by the value of the unused tickets? He still has the unused tickets as proof that he did not use them, and neither did anyone else.

Write a partial tax memo, including only the Conclusion, Authorities, and Analysis, responding to Leon's question.