Tax Questions Solicited

[BobDancer]

This coming Tuesday afternoon, we'll be taping a GWAE show with our resident tax expert, Russell Fox. Gamblers make up a significant portion of Fox's clientele.Any tax questions posted here by this coming Monday will be considered.

[billryan]

Not a VP tax question, but a casino one.
I win $15,000 playing BJ December 5th,2016 but don't cash them in until January,2017.
Which year do I owe taxes for?
Let's stipulate taxes are owed, the only question is which year.

[black4thgen]

Hi Bob,

I have several tax questions for you.

1. Are you able to include all winnings from drawings on 1099-MISC in with your gambling winnings on W2Gs? Does it matter if the drawing was from earned entries, hot seat, or free entry? Also how would winnings from a free slot tournament be handled?

2. Let’s say I won a car from a casino drawing and I received a 1099 for 25k but I could purchase the vehicle new for 23k. Would I include the fair value on my taxes or the amount that was reported? What if I turned right around and sold the car for 20k?

3. Would I be able to file as a professional gambler if I held a full time job as well? Would it depend on which job earned more income or the number of hours allocated between the two?

4. Would you count uncashed chips and vouchers as gambling winnings? Could you argue that they don’t count until you receive the cash?

Thanks.

[Deloradeuces18]

Are there any tax or casino rules that apply to one's Players Club card in the machine?For instance, say me and my boyfriend are taking turns playing on the same machine, but my Players Club card is always in. If he hits, does the fact that my card is in the machine have any bearing? I assume the player on the machine at the time owes the taxes, but I have always wondered if my card being in the machine would be a factor when it comes to the paperwork.

[Waiting4RF]

When filing a joint return (non professionals) and one person has W2Gs and was ahead for the year, can the losses of the spouse offset the W2G wins to make it a win of $0? You would still file the W2Gs but put in an equal amount for the losses since your spouse had the loses.

[DougJ]

Are there any tax or casino rules that apply to one's Players Club card in the machine?For instance, say me and my boyfriend are taking turns playing on the same machine, but my Players Club card is always in. If he hits, does the fact that my card is in the machine have any bearing? I assume the player on the machine at the time owes the taxes, but I have always wondered if my card being in the machine would be a factor when it comes to the paperwork.

Whoever tapped the button is the person who gets the W2G.

[DougJ]

When filing a joint return (non professionals) and one person has W2Gs and was ahead for the year, can the losses of the spouse offset the W2G wins to make it a win of $0? You would still file the W2Gs but put in an equal amount for the losses since your spouse had the loses.

If it's a joint return, you are pooling winnings and losses. So, one person's losses offset the spouses' wins.

[Vman96]

There was a lot of talk on other forums recently that Trump et. al. was planning to get rid of the federal W2G deduction on writing off gambling losses up to the amount of W2G wins. That didn't ring true, but if it did, how would it have changed your plan of action?

[olds442jetaway]

On the Federal side, we are taxed on gross gambling winnings. Technically, it doesn't matter if one has a slew of W-2Gs or just profits from various sessions without the tax form being issued. Everything gets added in together. That said, for practical purposes for most people, one offsets on the Federal side, their gross W-2G winnings by losses from their own records or records given to them by the casino. Last I knew the big issue will be the possible loss of state and local taxes being able be written off when one itemizes their deductions. In Ct. for instance if that deduction is lost, the itemized deductions for many people would be less than their standard deduction and therefore greatly affect one's Federal taxes since you can only offset your gambling losses if you itemize your deductions.
     To answer your question though Vman as presented, if for some reason I was unable to write off my gross gambling winnings on my Federal return by offsetting the losses, I would either have to stop playing vp or other casino gambling altogether or play such a small amount that the tax issues would be nearly meaningless.
     I still equate some of these proposals to the stock market. To me its like buying a hundred shares of a stock for say 10k. The stock goes nowhere and a few months later you say, I'm going to sell that stock invest in something else. You sell the stock for the same 10k. You are issued a 1099 for the 10k and are taxed on the entire 10k even though you made nothing. That is like what some are trying to do with gambling and what some states like mine have already done.
     If I get 50 W-2Gs for the year and add my other winnings to that I get a number to put on my tax return as gross winnings. I then itemize my deductions and offset that number up to the amount of my gross winnings because like most people, we lose much more than we win. If that ability goes away, I'm pretty much done with playing vp for money.
     As usual anything I post here are my own opinions and one should do their own research and consult their own tax advisors. Good luck out there and good health and luck to all.......