Quick question re gambling income

[getmeoutofvegas]

Howdy folks, first time poster. I'm a former realtor in Las Vegas who predictably got in over my head after the real estate collapse. I have $100k+ in credit cards. I am trying to do my homework and see if I qualify for a 7. Salary-wise, I am just under the current Nevada median of 46,412. Unfortunately, I have about 60k in gambling winnings since 4/1/08, all of which was pumped right back in to the slots. I have multiple W-2G's from 5 or 6 casinos.

So does the gambling income count as income on my means test? If so, can I subtract all of it out?

[StartingOver08]

Yes. All income is counted. That is why when you get ready to file you want to make sure the previous six months accurately reflects your true condition. They will average in the 'one time' income and it will artificially inflate your income and can force you into a 13.

[ansky0007]

Yes, Its income, Wait a few more months... and it will drop off. Usually they ask for 6 months of income and if you wait a few more months it might drop off the radar.

[justbroke]

Ouch.... if you have W-2Gs, then that is income! The Trustee will see it on your tax records, so don't try to hide it. What you need to do is, perhaps, put some more distance between the gambling income and filing. Make sure it's a good 6 months.

You can list your gambling losses on your Statement of Financial Affairs, but I don't think you can use them as deductions on Schedules I and J. I believe the purpose of putting them at least on the Statement of Financial Affairs is to show where the money went... especially if the winnings offset the losses.

[getmeoutofvegas]

so if it counts as income and puts me over the median, I can't turn right back around and subtract it for the same month I earned it?

[justbroke]

so if it counts as income and puts me over the median, I can't turn right back around and subtract it for the same month I earned it?

No. It's not an offsetting cost of living. Because there's a W-2G involved, it shows as income to the IRS. There is nothing on the forms (22A) which States "list monthly gambling losses here and subtract from monthly income". It's just not there.

[StartingOver08]

Most likely no. I filed CH 7. I too am a RE agent. I had to include my husbands income even though he is not filing and also does not contribute to the household expenses. (We have everything separate). The means test is not supposed to be fair. In fact, you will see that all income is included and many of the expenses are artifically reduced.

If you are a PA (corp) you will have another surprise too - any commission receivable you have prior to the filing belongs to the trustee (100% without deduction).

[getmeoutofvegas]

well, poo.

thanks for the assistance folks.

another question: I have a small second home in NorCal that I rent out to vacationers. I have no equity in the house. In fact it is undersecured by about $50k. any reason I couldn't keep it?

[getmeoutofvegas]

well, poo.

thanks for the assistance folks.

another question: I have a small second home in NorCal that I rent out to vacationers. I have no equity in the house. In fact it is undersecured by about $50k. any reason I couldn't keep it?

[justbroke]

another question: I have a small second home in NorCal that I rent out to vacationers. I have no equity in the house. In fact it is undersecured by about $50k. any reason I couldn't keep it?

Nope. No reason you couldn't keep it... unless...

• Are you current on all payments?
• Do you really want to keep something which is undersecured by $50K?
• If you rent it out, do you have a positive cash flow or are you at least breaking even?

if you can't answer yes to all of those questions... don't keep it. It's not worth it, since you'll have the debt discharged in your Chapter 7... just get out from underneath it.

If you can answer yes to those questions... then the decision is yours. My only question would be on the value of money. That is to say, being $50K upside down, is it worth that if the market appreciates? Would that $50K additional investment pay you back or will you just break even in the end? Do you have better things to do with the money?

I'm in a Chapter 13. The only reason I'm keeping my primary residence, is because I'm only $5K upside down on my first mortgage, and stripping the second mortgage! To me, that $5K is worth the potential.

Personally, I wouldn't attempt to keep two homes in a Chapter 7. I have two homes now. I'm surrendering one in my Chapter 13.

[StartingOver08]

Make sure you are current with the payments on the second house when you file.

Actually one of the BK attorney's on this site can answer much better, but I believe there is a benefit to you when filing bk and investment property. I don't know what it is because I couldn't keep my home or investment property.

[justbroke]

Make sure you are current with the payments on the second house when you file.

Actually one of the BK attorney's on this site can answer much better, but I believe there is a benefit to you when filing bk and investment property. I don't know what it is because I couldn't keep my home or investment property.

(2) modify the rights of holders of secured claims

[StartingOver08]

Well that is HUGE! If you did not have positive cash flow before, maybe after your BK modification you would!

[getmeoutofvegas]

yes I do have positive cash flow from the house.

lookss like the modification terms that some posters above were discussing are for chapter 13's, no? It's not worth filing a 13 to modify the mortgage, at least not to me. I just want to file a 7 and keep what I have.