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Jackpot Tax Form Advice -- 5754 vs 1099

#1

So, I was playing in an Indian Casino when my friend hit a jackpot playing on my money. The slot attendant was behind us at the time and wouldn't let me sign for the jackpot. But he didn't have his SS#, so they wont release the jackpot or W2, until we go back with his SS#.

Now, I'm trying to decide between him issuing me a 1099 form for the jackpot or giving the casino a 5754, telling them to pay me instead. Obviously, the 5754 is riskier to use at the casino. But if I have him issue me a 1099, is he still going to have to claim the W2-G on taxes? He takes a standard deduction, so I don't know where the 1099 he gives me takes off from. And if he doesn't put any winnings on the W2-G line of his 1040 form, will that force a paper audit, even if he includes the 1099 in his tax submission?

#2

So, I was playing in an Indian Casino when my friend hit a jackpot
playing on my money. The slot attendant was behind us at the time and
wouldn't let me sign for the jackpot. But he didn't have his SS#, so
they wont release the jackpot or W2, until we go back with his SS#.

Now, I'm trying to decide between him issuing me a 1099 form for the
jackpot or giving the casino a 5754, telling them to pay me instead.
Obviously, the 5754 is riskier to use at the casino. But if I have him
issue me a 1099, is he still going to have to claim the W2-G on taxes?
He takes a standard deduction, so I don't know where the 1099 he gives
me takes off from. And if he doesn't put any winnings on the W2-G line
of his 1040 form, will that force a paper audit, even if he includes
the 1099 in his tax submission?

Your friend can attach a note that the W-2G was issued in error and adjust
the full amount off, but that may still trigger a letter audit. Deducting
the amount as a gambling loss will not work as he takes the standard
deduction.

If you stand your ground the casino eventually has to give you the W-2G.
Your friend cannot legally sign the W-2G, which states at the bottom under
penalty of perjury the money belongs to him. If you hand them the filled-out
5754 that may help. It may take awhile and you may need to hire a lawyer to
send them a letter.

Cogno

#3

tooncesthecatwhocoulddriveacar wrote:

So, I was playing in an Indian Casino when my friend hit a jackpot
playing on my money. The slot attendant was behind us at the time
and wouldn't let me sign for the jackpot. But he didn't have his
SS#, so they wont release the jackpot or W2, until we go back with
his SS#.

Now, I'm trying to decide between him issuing me a 1099 form for
the jackpot or giving the casino a 5754, telling them to pay me
instead. Obviously, the 5754 is riskier to use at the casino. But
if I have him issue me a 1099, is he still going to have to claim
the W2-G on taxes? He takes a standard deduction, so I don't know
where the 1099 he gives me takes off from. And if he doesn't put
any winnings on the W2-G line of his 1040 form, will that force a
paper audit, even if he includes the 1099 in his tax submission?

Adding to Cogno ...

Using Form 1099-Misc isn't an option by which to transfer the income from your friend to you. It's generally issued only in conjunction with business transactions as required for payments which may be taxable to the recipient.

A deduction for the payment is still subject to qualification of deductibility as a valid expense, and even if permitted for an individual would be taken as an itemized deduction -- which won't benefit your friend.

ยทยทยท

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Form 5754 provides the means by which the W-2G can be issued in your name and your friend need not record the jackpot on their return. I suggest calling the slot manager, explain your friend was gaming on your card and money, and seek agreement that they'll accept the form and issue the W-2G and winnings to you.