Gambling winnings Tax question(s)

[Willie99]

[h=4]Gambling Losses Up to the Amount of Gambling Winnings[/h]


You must report the full amount of your gambling winnings for the year on Form 1040, line 21. You deduct your gambling losses for the year on Schedule A (Form 1040), line 28. You cannot deduct gambling losses that are more than your winnings. Generally, nonresident aliens cannot deduct gambling losses on Schedule A (Form 1040NR).

You cannot reduce your gambling winnings by your gambling losses and report the difference. You must report the full amount of your winnings as income and claim your losses (up to the amount of winnings) as an itemized deduction. Therefore, your records should show your winnings separately from your losses.

Diary of winnings and losses. You must keep an accurate diary or similar record of your losses and winnings.Your diary should contain at least the following information.

• The date and type of your specific wager or wagering activity.
  
• The name and address or location of the gambling establishment.
  
• The names of other persons present with you at the gambling establishment.
  
• The amount(s) you won or lost.

Proof of winnings and losses. In addition to your diary, you should also have other documentation. You can generally prove your winnings and losses through Form W-2G, Certain Gambling Winnings, Form 5754, Statement by Person(s) Receiving Gambling Winnings, wagering tickets, canceled checks, substitute checks, credit records, bank withdrawals, and statements of actual winnings or payment slips provided to you by the gambling establishment. For specific wagering transactions, you can use the following items to support your winnings and losses.

These recordkeeping suggestions are intended as general guidelines to help you establish your winnings and losses. They are not all-inclusive. Your tax liability depends on your particular facts and circumstances.
Keno. Copies of the keno tickets you purchased that were validated by the gambling establishment, copies of your casino credit records, and copies of your casino check cashing records.
Slot machines. A record of the machine number and all winnings by date and time the machine was played.
Table games (twenty-one (blackjack), craps, poker, baccarat, roulette, wheel of fortune, etc.). The number of the table at which you were playing. Casino credit card data indicating whether the credit was issued in the pit or at the cashier's cage.
Bingo. A record of the number of games played, cost of tickets purchased, and amounts collected on winning tickets. Supplemental records include any receipts from the casino, parlor, etc.
Racing (horse, harness, dog, etc.). A record of the races, amounts of wagers, amounts collected on winning tickets, and amounts lost on losing tickets. Supplemental records include unredeemed tickets and payment records from the racetrack.
Lotteries. A record of ticket purchases, dates, winnings, and losses. Supplemental records include unredeemed tickets, payment slips, and winnings statements.

 

[Willie99]

I believe what fishhead said to be true is true, however I would suggest that you maintain additional documentation. A log in and by itself may not be sufficient as the above IRS literature suggests.

A log also has to be substantive and provide detail some people may not be willing to provide, such as the names of the people who were present. Did the person who won report those winnings? Did you report them to him? Do you know that person? It can also give rise to other questions like do you have any winnings from such activities that have not been reported to you? If you use an offshore account, they may want you to provide a complete transaction history. Now with tax law, just like any law, it's not always black and white and it's not plausible for me to address every situation, and audits can vary between auditors and the perceived credibility of the individual being audited.

As for illegal activities, if you want to give the government a road map to illegal activities you're involved in, that's your decision and it's something I wouldn't advise. I think it would also diminish that all important credibility variable which you may be relying heavily upon.

Finally, you may be best advised to pay some taxes and move on as opposed to being caught committing fraud and / or admitting to participating in illegal activities. Allow room for plausible deniability, or maybe just swallow the pill if the downside is unacceptable. Some of you may not want them to start digging deeper into your lifestyle, be it legal or not.

 

[RudyRuetigger]

You winners catch no breaks at all...Thankfully I never have to worry about taxing profits

:toast:

 

[Betallsports]

Ok, think I got it.

Only other question I have is... like I said, I have a few Losing tickets. Maybe like $3-4K, I hit for $27K in the Hilton last year...
Can I Also use my Entry fee of $1,500 to deduct from my Winnings ?? Meaning can I add that to my Losing Tickets ?

I know I'm paying... and should have kept more losing tickets... but wondering if Entry Fees can be added to loses.

 

[mnmike]

Keep in mind you dont need anything unless you are audited, if you get a w2-g for a few thousand and deduct it away, that will likely not draw much scrutiny, if you win a $100 grand and do it, you are far more likely to run into trouble. They do know that most gamblers lose.

 

[Betallsports]

Keep in mind you dont need anything unless you are audited, if you get a w2-g for a few thousand and deduct it away, that will likely not draw much scrutiny, if you win a $100 grand and do it, you are far more likely to run into trouble. They do know that most gamblers lose.

Not saying, You are saying it. But if I "pad" like $3K to my already $4K of Tickets ) total of $7K in loses ) and pay Taxes on $20K
They more than likely will not come calling ?

 

[mnmike]

Not saying, You are saying it. But if I "pad" like $3K to my already $4K of Tickets ) total of $7K in loses ) and pay Taxes on $20K
They more than likely will not come calling ?

I highly doubt it would be a problem, if you won 27K I would knock at least half off without blinking(maybe more). You do have alot of losses right? You are in fact not cheating on your taxes if you write your losses off, what we're talking about is whether you might run into trouble if they ask for proof. And if by some chance they do audit you and say your records are insufficient, you're only paying what you would have anyway.

A buddy of mine had a coworker that gambled huge(a foreigner), he won 25 grand on the slots, paid the taxes right then(maybe 8K) and of course lost it in a week. , My friend told him he can get those taxes back if he writes off the loss and he didn't believe him, never did, think about it, the guy payed 8 grand in taxes he didn't owe and legally wasn't required.

 

[Betallsports]

I highly doubt it would be a problem, if you won 27K I would knock at least half off without blinking(maybe more). You do have alot of losses right? You are in fact not cheating on your taxes if you write your losses off, what we're talking about is whether you might run into trouble if they ask for proof. And if by some chance they do audit you and say your records are insufficient, you're only paying what you would have anyway.

Well like Most, I don't pay taxes on anything Offshore.

I probably have casino losses. never really used them before.

I won't knock it down half way... don't mind paying... But I wouldn't mind chipping away a few thousand.

 

[Willie99]

Ok, think I got it.

Only other question I have is... like I said, I have a few Losing tickets. Maybe like $3-4K, I hit for $27K in the Hilton last year...
Can I Also use my Entry fee of $1,500 to deduct from my Winnings ?? Meaning can I add that to my Losing Tickets ?

I know I'm paying... and should have kept more losing tickets... but wondering if Entry Fees can be added to loses.

you can use gambling losses from any source to offset gambling winnings, so your losing tickets are deductible. Will a profit / loss statement from casinos help? You can also deduct the $ 1,750 and $ 350 in expenses you incurred to participate in the Hilton Contest.

 

[Betallsports]

you can use gambling losses from any source to offset gambling winnings, so your losing tickets are deductible. Will a profit / loss statement from casinos help? You can also deduct the $ 1,750 and $ 350 in expenses you incurred to participate in the Hilton Contest.

So I will need to use a Standard 1040 form, And a 1040 Schedule A form ?

Might just get a CPA to do it.. lol Never have done my own taxes

 

[Fishhead]

if you won 27K I would knock at least half off without blinking(maybe more). You do have alot of losses right? You are in fact not cheating on your taxes if you write your losses off, what we're talking about is whether you might run into trouble if they ask for proof. And if by some chance they do audit you and say your records are insufficient, you're only paying what you would have anyway.

This, as stated earlier, a diary is sufficient for writing off losses UP TO THE AMOUNT of one's winnings.


For those that do not believe that only a diary is needed, the year I was audited, had close to $2,000,000 in winnings reported on LINE 21 with losses deducted on Schedule A.............had about 27 or so "signings" that year as I recall totaling around $100,000.

At the audit, the IRS agent was thrilled with my recordkeeping and I had no problems, ALTHOUGH HE DID SAY THAT he would have liked to seen a few WIN/LOSS STATEMENTS from the casinos, and SOME LOSING SPORTSBETTING TICKETS, but the diary was all that was needed.


Discussed at length with him how I had read the tax code that year and it stated that all I needed was a diary with detailed information such, but not limited to, DATE, CASINO, GAME PLAYED or SPORTS BET MADE, WON OR LOSS.........................and he told me that I was 100% correct.


Do not take my word as the gospel, UNITED STATE tax code is a complete mess, as most of us know.

One's best options if they believe they have a gambling tax issue is to consult a CPA who is well instructed in and had vast experience with gambling wins and losses...................these are not easy to find, do your homework.


As far as one filing as a "professional" or as a "recreational" player, that is a LONG discussion for another day.

 

[Willie99]

So I will need to use a Standard 1040 form, And a 1040 Schedule A form ?

Might just get a CPA to do it.. lol Never have done my own taxes

if you paid your proxy a % of your winnings, that's also deductible

 

[PatsFan1283]

if you paid your proxy a % of your winnings, that's also deductible

Fish not trying to say you aren't right but just wanted a 2nd opinion.

Willie will some BS journal of my losses offset a 1099 winnings? 1099 can be measured and no way around it, a journal just heresay really so while I hope fish is right and it works, just a little surprsied is all.

 

[Betallsports]

if you paid your proxy a % of your winnings, that's also deductible

Thanks Willie for all the answers

 

[Fishhead]

Fish not trying to say you aren't right but just wanted a 2nd opinion.

Willie will some BS journal of my losses offset a 1099 winnings? 1099 can be measured and no way around it, a journal just heresay really so while I hope fish is right and it works, just a little surprsied is all.

Just don't produce a fake diary.

As I have for many years on these forums, have recommended keep a diary..............this is a great time for everyone to start right now, as the new year just started.

The diary will serve more than just IRS issues.............it will give you a detailed report of one's own gambling and this alone should aid any gambler make money throughout the year.

Here is how I have done my diary for the past 20 years..................




Get a 3-ring binder
Get some 5-column sheets sold at office depot, or 3-column or 7-column
Use 'tab" dividers for seperating each one's different gambling activities(sports, video poker, slots, blackjack, poker, etc)

In the front of the binder, one will have their OVERALL daily WIN/LOSS amount........so say today I make $500, that will go in as a 500 win in my diary under the column WON(I use a 3-column sheet, WON-LOST-YTD)...................then in the different sections in the binder, report how that 500 was won.....................which could have been 900 from sports and losing 400 at blackjack, it is in these sections where one writes the CASINO/GAME PLAYED, DATE/WON/LOST or other detailed information

 

[Iutoffee]

Well like Most, I don't pay taxes on anything Offshore.

I probably have casino losses. never really used them before.

I won't knock it down half way... don't mind paying... But I wouldn't mind chipping away a few thousand.

i may be asking a silly question here, but why wouldn't you show offshore sports gambling winnings? If you're audited, the IRS would be able to see the increased "income" you're received, no? I ask as I've received multiple payouts frm 5dimes, etc., and am unsure if I should list these as taxable income (with losses deducted as well). I was thinking the answer is yes, but some of the feedback here is making me apprehensive. Thanks for any assistance.

 

[Fishhead]

Tax threads have longer lifespans than any other topic, other than those involving SBR bashing.

 

[PatsFan1283]

Just don't produce a fake diary.

As I have for many years on these forums, have recommended keep a diary..............this is a great time for everyone to start right now, as the new year just started.

The diary will serve more than just IRS issues.............it will give you a detailed report of one's own gambling and this alone should aid any gambler make money throughout the year.

Here is how I have done my diary for the past 20 years..................




Get a 3-ring binder
Get some 5-column sheets sold at office depot, or 3-column or 7-column
Use 'tab" dividers for seperating each one's different gambling activities(sports, video poker, slots, blackjack, poker, etc)

In the front of the binder, one will have their OVERALL daily WIN/LOSS amount........so say today I make $500, that will go in as a 500 win in my diary under the column WON(I use a 3-column sheet, WON-LOST-YTD)...................then in the different sections in the binder, report how that 500 was won.....................which could have been 900 from sports and losing 400 at blackjack, it is in these sections where one writes the CASINO/GAME PLAYED, DATE/WON/LOST or other detailed information

What is wrong with a fake diary? What is the difference?

 

[Betallsports]

i may be asking a silly question here, but why wouldn't you show offshore sports gambling winnings? If you're audited, the IRS would be able to see the increased "income" you're received, no? I ask as I've received multiple payouts frm 5dimes, etc., and am unsure if I should list these as taxable income (with losses deducted as well). I was thinking the answer is yes, but some of the feedback here is making me apprehensive. Thanks for any assistance.

No Detail's... but if the Offshore Shop is NOT declaring it to the US, why should I ??

I haven't always Won, but my last 3-4 years have been good.

 

[Fishhead]

No Detail's... but if the Offshore Shop is NOT declaring it to the US, why should I ??

I haven't always Won, but my last 3-4 years have been good.

Still reportable income BAS