Making a "Reward" into a LTCG

I think there was something on TV today that offered $100,000 to anyone who would give up their Smart Phone for six months or a year. Or something like that. How do we arrange things so that the reward - if we were to get it - would be taxed as long-term capital gain?

Just sell the phone, right? If you owned it for longer than a year.

JAD may have it. Change the deal. Phone owner gets a put option to sell phone to rich person or company for $100k, exercisable after a year and a day. Sale requires providing evidence of non-use of phone during that period. That evidence is the consideration required for a contract. Buyer's tax treatment depends on what his purpose was in the deal and can be handled after we figure out if this works. Maybe advertising or research?

How would the payer know the phone owner did not use another phone?

Vitamin water/coca cola is offering a winner in a twitter/Instagram contest the chance to give up their smartphone for the year. They are provided a dumb phone for emergency. If they last 6 months without using a smartphone they get $10,000. If they last a year they get $100,000.

In form arranging it as a sale of a phone may appear to give ltcg but is the substance still winning a prize for doing a challenge?

How do we arrange things so that the reward - if we were to get it - would be taxed as long-term capital gain?

Just cheat.

Incidentally, I have already not used my smartphone for something like ten years, how do I enter?

"This tape will self-destruct in five seconds. Good luck, Jim."

Basic due diligence requires we ask whether the prize is for not actually using the physical phone, or for not using the phone service.

Could the phone be powered off and used as a paperweight, or door stop? Would that still qualify? Could the phone be used as a calculator or camera, but without any connectivity?

If the contest prize is for not using the phone service, it seems that would be much easier to monitor and enforce.

There was a game show a while back where someone could win a prize for remaining a fixed amount of time (several minutes) in a bathtub with bucketsful of nasty creepy crawlies (think crayfish) dumped on their bare skin. Could that be finagled into a capital asset? If not, then how could agreeing to do without phone service be so treated?

makbo asks:

"...how could agreeing to do without phone service be so treated?"

Damn, I thought I already asked that question.

makbo asks:

"...how could agreeing to do without phone service be so treated?"

Damn, I thought I already asked that question.

No, you didn't. You asked about a prize to "give up their Smart Phone ". Does that mean the physical device, or the monthly service? Is it still a "smart phone", or even a phone at all, if you have no current service subscription?