Discussion:Gambling Winnings on Form 1099-Misc ??
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Discussion Forum Index --> Tax Questions --> Gambling Winnings on Form 1099-Misc ??
| 16 February 2008 | |
| Hi folks, A client plays cards at a local card room in his city. Client receives Form 1099-MISC with his winnings for 2007 in Box 3, Other Income. He claims he has more than enough receipts to prove he spent more than the amount won. So, he qualifies for "gambling losses to the extent of winnings." However, I think the card room provided him the wrong form to be able to zero out his winnings. Am I correct? Or not? I think he needs to receive Form W-2G. Any and all responses are appreciated. Thank you. | |
| 16 February 2008 | |
| No Kevinh5, Not comps. Winnings of a Texas Hold'Em tournament. Please try again. Thanks. | |
| 16 February 2008 | |
| Is it possible that "prize money" for winning a tournament is reported on a 1099Misc in box3 ,as opposed to "winnings" as from a blackjack table or a slot machine reported on a W2G? | |
| 16 February 2008 | |
| To Kevinh5, I know because I have to go by what the client tells me. I wasn't there to see for myself. To Newtaxguy, I wonder what form Phil Helmuth or the other Texas Hold'Em tournament big shots receive? With a Form 1099-MISC, Other Income, I can't use the Lacerte input page because I don't have all the information required so I can zero out the winnings/losses. Anyone on this board have clients who gamble? Thanks. | |
| 16 February 2008 | |
| Since when are you letting the tax software determine the correct tax treatment? Override it if it is not handling it correctly. | |
| 16 February 2008 | |
| kevin is correct, forget the reporting form received. It is the substance you report, not the presentation. Gamblin winnings get zeroed out using sched A. No sched A, then they pay the tax stuffs.
I have a lot of addictive clients. I'd love for me to be wrong and that there was a way to zero out winnings without Sch A, but I think nots. says I | |
Rgtaxservice (talk|edits) said: | 16 February 2008 |
| Winnings and losses don't just zero out. The winnings are reported as other income and the losses are deducted on Sch A. | |
Death&Taxes (talk|edits) said: | 17 February 2008 |
| And I thought I read this year that these type of winnings were to be reported for the first time; they never went on a W-2G. I have had several clients with mid-five figure winnings who in the past simply told me about them. | |
Ksnoopytax (talk|edits) said: | 17 February 2008 |
| I am not sure why it would be reported on a 1099-misc unless it is something other than gambling winnings. Here is the new law D & T was talking about.
http://www.irs.gov/irs/article/0,,id=174937,00.html I would assume these rules are for all poker tournaments but what about tournaments where you start with your own money? If I remember correctly, poker games used to have no required reporting by the casinos because it would be hard for the casino to track how much the player won or lost during the night. This also brings to mind the court case where the taxpayer tried to argue that tournament poker as a professional should be allowed as a trade or business because there was considerably more skill involved to be good and win tournaments such as calculating pot odds, etc... Of course the taxpayer was shot down in flames, but the judge did say that "as much as the taxpayer may be right, who is he (the judge) to override congress!" | |
Death&Taxes (talk|edits) said: | 17 February 2008 |
| Kevin and Fstein cut thru the red tape. Think of this as a 1099 that might have been on a W-2 but where you don't have any option of filing a 8919! | |
TaxNovice 1 (talk|edits) said: | 17 February 2008 |
| Pub 505 reads: Form W-2g...If you had gambling winnings...the payer may have withheld income tax. If tax was withheld, the payer will give you a form W-2G showing the amount you won and the amount of tax withheld. Report the amounts you won on line 21 of form 1040. If you had gambling winnings, you must use form 1040; you cannot use form 1040A or form 1040EZ.
Gamble losses can be deducted on Schedule A(Form 1040) as a miscellaneous itemized deduction. However, you cannot deduct more than the gambling winnings you report on line 21. | |
| 18 February 2008 | |
| Hi to all those who responded. I really appreciate your knowledge. Took a look at the IRS notice mentioned by Ksnoopytax (thank you Ksnoopytax). My client did not make more than $5K. No tax was withheld. Also, the reporting starts in 2008. This Form 1099 was for 2007. I guess the cardroom may be trying at least to conform to IRS rulings. I'll just do as TaxNovice 1 suggests and report the winnings on Form 1040, Line 21, and the losses on Schedule A. Thanks again for all assistance. Blessings & Prosperity to all. | |
