Winnings

[AngelinaCat]

While I do not advocate doing any kind of thing that could be considered fraudulent, I think I would have shut my mouth and started an 'Emergency fund' with that money. Especially, once your attorney said you could keep it.

[LadyInTheRed]

Anyone who wins $600 or more will receive a form W2-G. Anyone who wins any amount must report that amount as income (assuming they earn enough income from all sources to require filing a return), even if they do not receive a W2-G. Intentionally failing to report the income is tax fraud.

[catleg]

Actually the W2G kicks in at $1200.00. Very rarely do people with W2G's have net winnings equal to the gross amount reported. However, if you're not an itemizer you're s**t out of luck, the IRS says pay me.

My point being, it is possible (indeed: likely) to be a net loser on gambling, PLUS you have increased your tax liability as a "bonus".

Nobody seems to be in any hurry to "fix" this problem, with casinos proliferating across the country, it's another undeserved source of income for the govenment.

Play table games not slots.

[LadyInTheRed]

Actually the W2G kicks in at $1200.00.

Thank you for the correction. I did a quick google search and didn't read carefully. For slot machine's and bingo, the reporting threshold is $1200. It varies for different kinds of gambling winnings.

Very rarely do people with W2G's have net winnings equal to the gross amount reported. However, if you're not an itemizer you're s**t out of luck, the IRS says pay me.

My point being, it is possible (indeed: likely) to be a net loser on gambling, PLUS you have increased your tax liability as a "bonus".

Yep.

The important point I wanted to make is that whether you receive a w2g or not, gambling winnings of any amount are taxable income that must be reported on your income tax returns.

Play table games not slots.

I like craps. I haven't played in a long time. But, when I did, I considered it entertainment, not a way to make money. I would start with a certain amount of cash and when it's gone I'd stop. I have had hours of cheap entertainment that way. It wasn't unusual to come out a couple of hundred dollars ahead or to break even after getting ahead and then losing for a while. It isn't as fun when you start losing, so for me it was always easy to stop when I was even again.

[catleg]

The important point I wanted to make is that whether you receive a w2g or not, gambling winnings of any amount are taxable income that must be reported on your income tax returns.

Yes this is essential for everyone to understand. They don't go away. They don't care if you have a net loss. If you don't report the W2G's as income your return will be flagged and you will be assessed tax on your "winnings". If you're 2-3 years into a ch13 this could be disasterous.
If you are taking the standard deduction you can't deduct your losses at all. So if you have tons of losses and can back it up somehow, you are forced to give up 12,000 worth of deductions (married filing jointly) by itemizing. Not good.

Oh by the way the match will come back and bite you about 18 months after the original filing date of the return.

I like craps. I haven't played in a long time. But, when I did, I considered it entertainment, not a way to make money. I would start with a certain amount of cash and when it's gone I'd stop. I have had hours of cheap entertainment that way. It wasn't unusual to come out a couple of hundred dollars ahead or to break even after getting ahead and then losing for a while. It isn't as fun when you start losing, so for me it was always easy to stop when I was even again.

I enjoyed playing the Don't Pass/Don't Come , getting full odds behind 3 or 4 numbers and getting a 7-out to win all at once.
The trick then is to leave ,since it rarely happens twice. It's easy to get a spot at a cold dice table too!