vpFREE2 Forums

Trespass at Casino Montelago

#1

I'm just reporting what I've been told in the audits Harry. My comments pertaining to other rewards seem to make sense to me, in that if you report slot card reward cash as income, you'd probably be inclined to report credit card reward cash back etc. also. I don't see where buying something, winning something, or losing something has anything to do with it.

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----- Reply message -----
From: "vp_wiz" <harry.porter@verizon.net>
To: <vpFREE@yahoogroups.com>
Subject: [vpFREE] Re: Trespass at Casino Montelago
Date: Mon, Oct 24, 2011 7:36 pm
rob.singer1111@yahoo.com wrote:

Yes, gambling profit. Cash back etc. is no different than airline

miles, hotel points, or any other reward program.

Since I don't haven't had any discussions with the IRS on this matter, whatever I offer up here must be considered "academic".

That said, I find myself hard pressed to imagine an examiner wouldn't view the relationship between cashback and the underlying reported gaming activity to be sufficiently strong to warrant combined reporting.

"Cashback" takes many guises, of course ... but envision making a compelling argument in a case with same day cashback that a $1000 session loss is deductible, but $100 of cashback received same day from that activity is non-reportible.

Your position, Rob, taken to the extreme, argues that if I lose $5000 during a 100% loss rebate promotion, the loss is deductible, but the refund need not be accounted for.

Bear in mind that they key distinction I'm making re your posted comment is the imminent tie between cashback and a reportable activity. None of the other items you note as being similar have as strong a tie to another taxable event (although many may indeed be earned in loose conjunction with activities having tax significance).

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

#2

Rob, I'll try to clarify my thoughts here ...

Say you buy a computer printer and it comes with a $100 rebate. It's a no-brainer that there's no implication re the IRS for the average joe -- it's simply a rebate on the purchase price.

However, if you happen to take a business deduction for the printer, then there's no way around the fact that the rebate reduces your basis in the printer and your corresponding deduction.

The way I see it, it's the same situation with cashback: If you aren't reporting anything on your return related to your wins/losses, then cashback is a reporting non-event as well. But once you report wins and offset them with losses, it's necessary to reduce those losses with any redeemed cashback (in other words, what you report on your return should reflect your actual net cash impact from gaming).

But I have no personal vested interest in this position, Rob, and if your reporting (x. cashback) passes muster, more power to you.

- H.

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--- In vpFREE@yahoogroups.com, "rob.singer1111@yahoo.com" <rob.singer1111@...> wrote:

I'm just reporting what I've been told in the audits Harry. My comments pertaining to other rewards seem to make sense to me, in that if you report slot card reward cash as income, you'd probably be inclined to report credit card reward cash back etc. also. I don't see where buying something, winning something, or losing something has anything to do with it.