I was told by my tax accountant, in no uncertain terms, that you must report merchandise, such as a car, with your norma income. Therefore, you must pay tax on it.
steveinnv
[Non-text portions of this message have been removed]
W2G versus 1099 MISC
<<I was told by my tax accountant, in no uncertain terms, that you must
report merchandise, such as a car, with your norma income. Therefore, you
must pay tax on it.>>
I suggest you look for a new accountant.
Cogno
I think that we must all come to the conclusion that NO ONE really understands all of the
tax laws (federal, state and local) concerning gambling. I further think that this lack of
understanding has been caused purposely, by the vague ways that the statutes have been
written.
Sadly, there are no legislators, in their right mind, who would ever sponsor a bill that
logically, fairly, and completely defines gambling and the taxation thereof.
As we all know (with my tongue firmly planted in my cheek), gambling is a sin and brings
down wrath and ruin on all who participate. But, again sadly, many the man/woman "in
the street" firmly believe this. And, legislators have to worry about getting re-elected.
The sponsoring of any meaningful gambling legislation would just be a bad bet for any of
them. We are just stuck with what is, and we must make the best of it. I do not see any
"relief" coming from anyplace or anyone.
Just more of my opinions as we find ourselves in the midst of "IRS season"... <smile>
.....bl
···
--- In vpFREE@yahoogroups.com, "Cogno Scienti" <cognoscienti@...> wrote:
<<I was told by my tax accountant, in no uncertain terms, that you must
report merchandise, such as a car, with your norma income. Therefore, you
must pay tax on it.>>I suggest you look for a new accountant.
Cogno
<<I think that we must all come to the conclusion that NO ONE really understands all of the
tax laws (federal, state and local) concerning gambling. I further think that this lack of
understanding has been caused purposely, by the vague ways that the statutes have been
written.>>
They are vague, it is so true. But as we mention in "Tax Help for the Frugal Gambler," one of the big problems is that the "rules" were written in the 70's and have not been updated to account for inflation and the introduction of high-denomination machines. We also say: "Don't look for the feds to raise the $1,200 threshold that triggers a W-2G. With the non-compliance of gamblers already widespread, plus 'sin activities' always providing a good taxation target, we're much more likely to see them lower that paperwork figure."
Another issue is that many tax preparers, accountants, and other professionals may be very knowledgeable about most tax issues, but know nothing personally about gambling. So for one of them to say that your gambling taxes MUST be done a certain way - and you know they don't have personal knowledge of gambling taxes - a red flag should go up in your mind! Here's where a second opinion is always a good thing.
The main issues that are gray:
1. gambling 1099 reporting
2. recreational or professional gambler
3. W2G vs. session reporting
We have covered all of these in our tax book, giving more an open-ended discussion: here are the facts and the alternatives - now you must talk with a professional (or two) to adapt them to your own situation. And there are always more aggressive solutions and more conservative ones, depending how much risk you want to take in making your interpretation of the vague rules.
So we must be careful on this forum in what we say is the "one way." Some rules are clear-cut, like you can't net out wins and losses at the end of the year. Most are not.
···
________________________________________
Jean $¢ott - "FRUGAL VIDEO POKER"
This new book (autographed) and other
frugal products are now available at my
new Web site, http://queenofcomps.com/.
E-mail address is queenofcomps@cox.net.
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There is a tax court case on point on this issue, it is even
referenced in the new case that someone just posted - it is called
Libutti - you can probably find the full text of the case on line
somewhere, but in essence Libutti was Trump's biggest customer during
the 1980's and showered him with all sorts of expensive gifts
including cars, rare Chinese jade etc - you want to read the case just
to see what high end comps look like -
I should make two points here - Libutti was 1099ed on the expensive
items and included them as gambling income as used his losses to
offset them. He of course received other comps like food and hotels,
etc that were not 1099ed and he did not report those and apparently
the IRS never suggested he should at least from the court case. In
fact, the Court took pains in a footnote, that it was taking no
position on whether comps were even taxable, just starting with the
premise of the comps that were reported as income, whether it
constituted gambling income to which gambling losses can be applied.
The Court held that so long as there was a nexus between the gifts and
the gambling activity, meaning he would not have gotten the gifts had
he not gambled, it would constitute gambling income and losses can be
used to offset them.
--- In vpFREE@yahoogroups.com, "Cogno Scienti" <cognoscienti@...>
wrote:
<<I was told by my tax accountant, in no uncertain terms, that you
must
report merchandise, such as a car, with your norma income.
Therefore, you
···
must pay tax on it.>>
I suggest you look for a new accountant.
Cogno
Wow!! This guy REALLY gambled!!
Facts in Libutti - Mr. Libutti gambled extensively at Trump Plaza in Atlantic City. Upon audit
by the IRS, Mr. Libutti received total assessments for the three years involved in excess of
$1.4 million. Mr. Libutti incurred losses at Trump Plaza of $4,139,100 in 1987, $3,080,050
in 1988, and $1,215,900 in 1989. "Comps" during this time totaled $443,278 in 1987,
$974,992 in 1988, and $1,126,856 in 1989.
The "comps" included these automobiles: five Rolls Royces, three Ferraris, one Bentley
Corniche, and one Mercedes Benz. "Comped" vacations included five to Europe and one to
California. Jewelry "comps" included a Rolex watch and bracelet, a 2.7carat diamond, and
various other bracelets and earrings. Mr. Libutti was also "comped" 178 bottles of Cristal
Rose champagne. Entertainment "comps" included tickets to the theater and sporting events
such as the Super Bowl, NCAA basketball tournament, boxing events, and the United States
Open in Flushing Meadows