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More on Taxes and Gambling

Started by Talesman, September 15, 2008, 08:46:56 PM

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Talesman


The Good folks in the EU and AU can skip this.

Today's Question of the Day at the Las Vegas Advisor was an interesting one. 

A questioner asked: "If you hit a natural royal flush on a 100 Play
video poker machine, for tax purposes is that counted as 100
separate payouts that do not need to be reported, or is it one
big payout that must be reported?


Actually it is a good question although I already knew the answer. 
To some it would seem logical that each hand was independent, but
that's not the case (as much as we would like it to be).

The published answer was: "If you're dealt a royal flush on a Hundred
Play video poker machine, you're issued a single W-2G. In fact, all
line winners on one "play" of a multi-line machine are totaled together
and are considered one "hand."


"For example, Brad Scott, Jean Scott's husband, was once dealt
a royal while playing a quarter Hundred Play machine. His jackpot?
$100,000. His W-2G? $100,000."


LVA went on to say: "Note that the IRS requires you to report all
winnings. This is true whether you receive tax paperwork or not.
This doesn't mean that if you cash out more than $1,200 on a slot
of VP machine after a period of play, you have to be issued a W-2G.
It's required only for the win of $1,200 or more on one hand or spin."


They went on to quote a section of Jean Scott and Marissa Chien's book about
gaming taxes.  In it Jean and Marissa took a potshot and me and my compadres.

"Both players and casinos harbor some widespread misconceptions
about W-2s. First, most players believe (or want to believe) that if
you don't get a W-2G, you don't have to report that particular gambling
win. And this viewpoint is supported by information in print, even from
otherwise accurate gambling writers, seeming to encourage players to
look for a machine with a top jackpot under $1,200."


Well Jean and Marissa, I'll advocate that till they bury me.

And the next to last line in the article was:
"....you're responsible for reporting all gambling wins, and whether you
get a W-2G or not has no bearing on that. Just because many people
don't report gambling wins when there's no W-2G evidence, that won't
help you in an IRS audit."


Good advice ladies. 



Talesman

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