vpFREE2 Forums

Misc 1099R & taxes

#1

I'm of the opinion that if you are getting drawing winnings where your
entries in the drawing are dependent on how much you play or on winning jackpots,
they are much more like some sort of a "bonus" win than anything else, and
therefore a gambling win. If tournament entry is dependent on your play, than
tournament wins also should be considered gambling winnings, regardless of whether
you paid a fee or if it was a "free" tournament.

Therefore I have been reporting such wins as gambling wins and just put a
note in with my tax return, explaining that the 1099-Misc were wins dependent on
gambling.

So far, no auditing....but you never know.

The IRS regulations don't really cover these situations, so it is up to you
to interpret how you are going to report.

I'm in the midst of working on my tax return, and the W2Gs have pushed up my
adjusted gross income to the point that I'm losing some exemptions, which is
nasty, since my losses are greater than my wins. It just doesn't seem fair.
Do you include the full amount of the W2G as a "win" or can you deduct the
amount you put into the machine to get the W2G? Another gray area. Right now I'm
going on the assumption that I have to include the full amount as a "win" and
deduct the amount put into the machine as a "loss" - but this is killing me.
Other people may interpret this differently. I'm going back to read Jean
Scott's new Tax Guide to see if it can clarify.

Another gray area is cashback/bonus cashback/etc. I choose to include these
in my calculations.

What about "gifts" - apparently they are not taxable. Is a gift card to
Macy's a gift like a free dinner or a t-shirt, or is it more like a cashback
check? Again, this is a gray area.

Unfortunately the tax code regarding gambling is totally outdated and does
not cover the details we all would like to have.

The best we can do is definitely report all W2Gs and Misc Income Forms in
some way on our return, itemize when necessary to counter wins with losses, KEEP
A CONTEMPORARY GAMING DIARY as some proof of your wins/losses, and get those
sometimes (often) inaccurate win/loss statements as backup evidence, and pray
that we don't overpay our taxes by too much as our adjusted gross income goes
up (the government does need the money but....) as we pray that we don't have
to go through the hassle of an audit.

April 15 is coming soon............ARRRRGGGGGHHHH

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#2

Linda, see my other post about living in Vegas. You definitely need to read my tax book. You do NOT count W2G's as your "wins." This is not vague in the IRS material. They specifically say "session wins." Most sessions you get a W2G, you do not "win" that whole amount.

···

________________________________________
Jean $¢ott - Go to http://www.FrugalGambler.biz
for VP software and strategy cards; "frugal" books;
and the NEW "Tax Help for the Frugal Gambler."

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

#3

<<I'm of the opinion that if you are getting drawing winnings where your
entries in the drawing are dependent on how much you play or on winning jackpots,
they are much more like some sort of a "bonus" win than anything else, and
therefore a gambling win. If tournament entry is dependent on your play, than
tournament wins also should be considered gambling winnings, regardless of whether
you paid a fee or if it was a "free" tournament.

Therefore I have been reporting such wins as gambling wins and just put a
note in with my tax return, explaining that the 1099-Misc were wins dependent on
gambling.>>

That, in Marissa's opinion, is the correct way to do this.

···

________________________________________
Jean $¢ott - Go to http://www.FrugalGambler.biz
for VP software and strategy cards; "frugal" books;
and the NEW "Tax Help for the Frugal Gambler."

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

#4

I certainly agree with misscraps on the "unfair" treatment of gambling winnings. I was complaining about reporting my W-2Gs (only takes $600 at the races) to some friends at my local racetrack only to find out I got off easy. The increase in adjusted gross income caused the alternative minimum tax to kick in on several people and cost them a lot of money even though they lost money gambling.

I thought I was safe playing only .25 positive vp, but I was playing PickEm (only decent game available) at the Harrahs in St Louis and got a Royal for my first vp W-2G. I just finished my taxes and escaped the dreaded AMT, but this would have been my first year with the standard deduction instead of itemizing, so I guess it cost me a little. All the record keeping is a real pain as well. I gamble to have fun and not to be a part time accountant.

If anyone knows of any organizations trying to reform the tax laws on gambling I would like to know so I can support them. Of course I agree we should pay our taxes, but the "fairness" issue is critical. After all didn't "unfair" taxes have something to do with the American revolution.

Chris

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#5

The Fair Tax movement would solve this problem. You
would not pay tax on earnings of any kind but pay a
tax on consumption. See FairTax.org.

···

--- chris yeager <paintpoker@yahoo.com> wrote:

I certainly agree with misscraps on the "unfair"
treatment of gambling winnings. I was complaining
about reporting my W-2Gs (only takes $600 at the
races) to some friends at my local racetrack only to
find out I got off easy. The increase in adjusted
gross income caused the alternative minimum tax to
kick in on several people and cost them a lot of
money even though they lost money gambling.

I thought I was safe playing only .25 positive vp,
but I was playing PickEm (only decent game
available) at the Harrahs in St Louis and got a
Royal for my first vp W-2G. I just finished my
taxes and escaped the dreaded AMT, but this would
have been my first year with the standard deduction
instead of itemizing, so I guess it cost me a
little. All the record keeping is a real pain as
well. I gamble to have fun and not to be a part time
accountant.

If anyone knows of any organizations trying to
reform the tax laws on gambling I would like to know
so I can support them. Of course I agree we should
pay our taxes, but the "fairness" issue is critical.
After all didn't "unfair" taxes have something to
do with the American revolution.

Chris

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