vpFREE2 Forums

1099's from tournaments

#1

Hi
all income is taxable ,unfortunely, dont matter if its free play or
from a $ bill you found on the street,

A 1099 from a tournament is NOT gambling winnings however( those are a
W2G) & should not be included with such, it is consider a "prize or
award" same as a game show prize & falls under "other income"

But that is not all bad as then you are allowed to deduct " expenses to
produce that income" such as entry fees, travel expenses , keep good
records!!

Consult your tax person.

M J
tax info= irs.gov, look for Pub 17
BJ & VP charts = wizardofodds.com
VP charts only , VPfree thanks to Tomski
all above are free!!!!!!!!!!!!!!!!!!

#2

Thanks, MJ. That's what I thought. And, that is how I have always prepared
my tax returns. I have not deducted any gambling losses against the 1099's
that I received from tournaments.

But, when I causally said the same thing as part of a post, everyone
(including J$) said that I was wrong. They all said that I should be
deducting the gambling losses against the 1099 income, since the income was
'related to' the losses.

So, since I work for a public accounting firm, I asked a tax preparer in my
office who has 20+ years experience. She said that, contrary to what I was
doing, I should be deducting the additional losses against the 1099 income.
She said that is what she would do, if any of our clients were in the same
situation.

I'm really not sure if I should file amended returns or not. And, I am not
sure how I will do my 2005 return.

···

On 12/24/05, mklpryy24 <mklpryy24@yahoo.com> wrote:

Hi
all income is taxable ,unfortunely, dont matter if its free play or
from a $ bill you found on the street,

A 1099 from a tournament is NOT gambling winnings however( those are a
W2G) & should not be included with such, it is consider a "prize or
award" same as a game show prize & falls under "other income"

But that is not all bad as then you are allowed to deduct " expenses to
produce that income" such as entry fees, travel expenses , keep good
records!!

Consult your tax person.

M J
tax info= irs.gov, look for Pub 17
BJ & VP charts = wizardofodds.com
VP charts only , VPfree thanks to Tomski
all above are free!!!!!!!!!!!!!!!!!!

[Non-text portions of this message have been removed]

#3

mklpryy24 wrote:

<<A 1099 from a tournament is NOT gambling winnings however( those are a
W2G) & should not be included with such, it is consider a "prize or
award" same as a game show prize & falls under "other income">>

I do not know the tax qualifications of the person who wrote this, but it is definitely erroneous information. Brad and I - plus many many other gamblers we have known - have for many years put our 1099's that come from casino drawings and tournaments into our total gambling income - and offset them with our gambling losses - and in some cases our expenses, depending on how we file. I know of no one who has had this practice reversed in an audit (although it may have happened on occasion- the IRS is notorious for uneven rulings). Many accountants and tax preparers who are knowledgeable about gambling issues say that the form one gets (W2G or 1099) does not make the difference in how you report obvious gambling winnings. This is supported in that casinos sometimes differ in what form they use for drawings and/or tournaments.

I will give you one caution - if you don't count your gambling income as the exact total of your W2G's (which in most cases you shouldn't or you will pay more in taxes than you need to), then you need to add a sheet of explanation explaining that your actual sessions wins are not the same as your W2G figure. On this sheet we list all our W2G's and all our gambling 1099's. One year we forget to include this list, and we got a letter audit, which was resolved easily when we sent them the missing sheet.

Another explanation - 1099s you would get from, for example, a grocery store drawing where you had paid no money to enter would NOT be included in gambling income. Same for prizes won on a TV show, etc. We would only count drawings and tournaments that are directly related to our gambling.

This same person has stated that one can go to IRS publications to get all your answers for tax questions free. If this were true, there wouldn't be the hundreds (thousands?) of tax help books online and in book stores and tax preparers on every other corner. We all need all the help we can get since the IRS employees can't even agree on most issues!!!! :slight_smile:

···

________________________________________
Jean $�ott - http://www.FrugalGambler.biz
  Tax time is coming up - groan! "Tax Help
   for the Frugal Gambler" can answer many
   of your questions!

#4

if you don't count your gambling income as the

exact total of your W2G's (which in most cases you shouldn't or you will
pay
more in taxes than you need to), then you need to add a sheet of
explanation
explaining that your actual sessions wins are not the same as your W2G
figure.

That may be true if your claimed winnings add up to less than the total of
the W-2Gs.

I've filed several times with more gambling winnings than the total of the
W-2Gs I received (and deducted the losses.) The IRS accepted them happily,
and so far hasn't said a word about it.

[Non-text portions of this message have been removed]

···

On 12/31/05, Jean Scott <QueenofComps@frugalgambler.biz> wrote:

#5

--- In vpFREE@yahoogroups.com, "Jean Scott" <QueenofComps@f...>
wrote: -

"I know of no one who has had this practice reversed in an
audit (although it may have happened on occasion- the IRS is notorious
for uneven rulings."

The relevant question here is:

Do you know of anyone who has been audited by the IRS who included
gambling related 1099's with their Gambling Winnings?

#6

--- In vpFREE@yahoogroups.com, "Jean Scott" <QueenofComps@f...>
wrote: -

"I know of no one who has had this practice reversed in an
audit (although it may have happened on occasion- the IRS is

notorious

for uneven rulings."
***************************************************************

name one "uneven ruling" you know about. : )
M J

···

--- In vpFREE@yahoogroups.com, "jw776655" <jw776655@y...> wrote:

#7

VERY good question! So, I will repeat it and ask a bit more....

Do you know of anyone who has been audited by the IRS
who included gambling related 1099's with their gambling
winnings?

If so, what was the outcome?

···

On 1/1/06, jw776655 <jw776655@yahoo.com> wrote:

--- In vpFREE@yahoogroups.com, "Jean Scott" <QueenofComps@f...>
wrote: -
"I know of no one who has had this practice reversed in an
audit (although it may have happened on occasion- the IRS is notorious
for uneven rulings."

The relevant question here is:

Do you know of anyone who has been audited by the IRS who included
gambling related 1099's with their Gambling Winnings?

[Non-text portions of this message have been removed]

#8

<<The relevant question here is:

Do you know of anyone who has been audited by the IRS who included
gambling related 1099's with their Gambling Winnings?>>

Yes, I have heard of a couple who "passed." We ourselves have not been audited yet - will let everyone know what happens if we ever have to go through this trauma. I think it is significant that putting your 1099s in with your W2Gs must not put up a red flag and cause you to be audited especially for that - or else a lot more of us would have been audited.

···

________________________________________
Jean $�ott - http://www.FrugalGambler.biz
  Tax time is coming up - groan! "Tax Help
   for the Frugal Gambler" can answer many
   of your questions!

#9

<<if you don't count your gambling income as the

exact total of your W2G's (which in most cases you shouldn't or you will
pay
more in taxes than you need to), then you need to add a sheet of
explanation
explaining that your actual sessions wins are not the same as your W2G
figure.>>

King Fish then wrote:

<<That may be true if your claimed winnings add up to less than the total of the W-2Gs. I've filed several times with more gambling winnings than the total of the
W-2Gs I received (and deducted the losses.) The IRS accepted them happily, and so far hasn't said a word about it.>>

That makes sense. The IRS usually isn't going to complain if you are claiming more income than the W2Gs - they figure you are crazy or super honest!!! :slight_smile: Your return will usually get kicked out automatically by a "machine," not a person, if you claim less and don't write an explanation. That is just a reconciliation of paperwork issue programmed into their computers.

An aside here, some gamblers always just count their W2Gs (and 1099s) as their gambling income when their real income is higher. In an audit, their diary would have to support that smaller figure or they might end up owing a lot more money! A knowledgeable IRS auditor would look at any total W2G and know that isn't the exact win figure. Of course, there is no problem if in an audit your diary shows a lesser figure - I don't think the IRS gets upset when you pay more taxes than you really had to. Maybe they would even give you a refund? Maybe plus interest? :slight_smile:

···

On 12/31/05, Jean Scott <QueenofComps@frugalgambler.biz> wrote:

________________________________________
Jean $�ott - http://www.FrugalGambler.biz
  Tax time is coming up - groan! "Tax Help
   for the Frugal Gambler" can answer many
   of your questions!

#10

I file as a professional gambler and ALL winnings are totalled and
reported on Schedule C. 1099_Misc's and W-2G's were treated
identically. I was audited and given a clean bill of health.

Curtis Rich wrote:

···

VERY good question! So, I will repeat it and ask a bit more....

Do you know of anyone who has been audited by the IRS
who included gambling related 1099's with their gambling
winnings?

If so, what was the outcome?

#11

Does it make any difference if someone files as a
'professional gambler' (Sched. C) or not?

···

On 1/3/06, ederekf_lv <lvgamb00ler@cox.net> wrote:

I file as a professional gambler and ALL winnings are totalled and
reported on Schedule C. 1099_Misc's and W-2G's were treated
identically. I was audited and given a clean bill of health.

Curtis Rich wrote:

> VERY good question! So, I will repeat it and ask a bit more....
>
> Do you know of anyone who has been audited by the IRS
> who included gambling related 1099's with their gambling
> winnings?
>
> If so, what was the outcome?

[Non-text portions of this message have been removed]