In a message dated 2/29/2004 12:40:26 AM Pacific Standard Time,
vpFREE@yahoogroups.com writes:
<<< Date: Sat, 28 Feb 2004 15:51:14 EST
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.>>>
I've read the Guide but I don't remember this being covered. However, the way
you're doing it is the way I would do it. I do remember putting in 1099s in
the 2001 Turbotax & being able to offset it with gambling losses. This was a
change from the 2000 & prior year's Turbotax which didn't give you this option.
As for the loss of deductions due to higher gross income, you're right, it's
not fair. What we need is another schedule for casino gambling similar to
schedule D for that other form of gambling in investments.
What needs to be done is for someone to do a comprehensive comparison of how
gambling wins & losses are treated vs investment wins & losses. If the
spotlight were to shine on the inequities, it would stop a lot of people from
gambling and/or cause proponents of gambling to push for some changes which would
lead to a fairer system. A couple of the inequities:
1. loss of std deduction in order to claim gambling losses vs ability to keep
std deduction while claiming losses on sched D
2. reporting gross win which artificially boosts other income vs netting
gains/losses then adding it to other income.
#2 can put people into AMT territory who would not otherwise even be close.
(I'm on the road right now & writing from memory so please correct me if I'm
wrong.)
<<<Another gray area is cashback/bonus cashback/etc. I choose to include
these
in my calculations.>>>
I would + bouncebacks but only if they're used.
<<<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.>>>
There is one case when you do want an audit. When you've discovered that
you've significantly overpaid & you're past the 3-yr limit for a revision. IRS can
go back as far as you have records. Of course, it wouldn't be wise to advise
them that you have a large refund waiting in a prior yr.
[Non-text portions of this message have been removed]
ยทยทยท
From: misscraps@aol.com
Subject: Re: Misc 1099R & taxes