Question to those you have cashed out in the past

lichtman · Post by **lichtman** » Wed Dec 27, 2006 2:06 am

For those tax-minded previous winners:

Did the winnings come classified as gambling winnings or self-employed/independent contractor earnings?

It makes a difference as far as being able to offset winnings with losses (if it is gambling winnings) and having to match and pay FICA if it is self-employed/independent income.

Thanks!

King of Queens · Post by **King of Queens** » Wed Dec 27, 2006 5:29 am

1099-M

richieprimo · Post by **richieprimo** » Wed Dec 27, 2006 6:52 am

Can I write off the 10% of my winnings that I must give to Guido "Fishface" Linguini from 13th and Wolf?

Dr. FI$HER · Post by **Dr. FI$HER** » Wed Dec 27, 2006 6:57 am

Lee-

I believe they are gambling winnings which can be offset with any gambling losses.

[ December 27, 2006, 01:07 PM: Message edited by: Dr. FI$HER ]

King of Queens · Post by **King of Queens** » Wed Dec 27, 2006 8:00 am

Originally posted by Dr. FI$HER:
Lee-

I believe they are gambling winnings which can be offset with any gambling losses. Incorrect

Dr. FI$HER · Post by **Dr. FI$HER** » Wed Dec 27, 2006 8:24 am

K of Q-

Why can't these be offset with gambling? And if not what can you offset them against?

lichtman · Post by **lichtman** » Wed Dec 27, 2006 8:36 am

I know that I'm getting detailed here, but was it reported in Box 3 of the 1099m or box 7?

Box 3 good, box 7 bad. If it is in box 7, we would owe payroll taxes on that money.

I guess they are not classified as gambling winnings because Krause Publications is not licensed to run a gambling operation.

[ December 27, 2006, 02:36 PM: Message edited by: Lee Scoresby ]

Ted's Cracked Head · Post by **Ted's Cracked Head** » Wed Dec 27, 2006 9:18 am

I will also need a clarification on this as I was under the impression that you could write off gambling losses like losing lottery tickets and horse racing losers. I think I did this last year with my winnings? I will check my return.

IN 2001 I claimed "gambler" and wrote off my "home office" expenses and travel stuff for some major pony winnings and in 2005 the IRS decided that I was wrong. My accountant suggested we were right but that fighting them would be costly and might set me up for future scrutiny. That I did not need so I ate all of it.

I will be calling my accountant next week to discuss this very issue and I will post what he says.

I would be curious to hear what others say too.

[ December 28, 2006, 11:57 AM: Message edited by: Ted's Cracked Head ]

ultimatefs · Post by **ultimatefs** » Wed Dec 27, 2006 9:51 am

pretty sure you can only write off the expenses that pertain to your winnings. Anything NFFC related like all league entry fees, mags, travel, hotel, etc...

lichtman · Post by **lichtman** » Thu Dec 28, 2006 4:44 am

After further investigation, I am pretty certain that because these winnings are reported as "miscellaneous income" on form 1099-M as opposed to "certain gambling winnings" on form W2-G you can not deduct losses against them. This is because as far as the IRS is concerned, you won a "prize" not gambling winnings.

I do not believe that Krause is licensed to run or pay out "certain gambling winnings" so there is no way they can send us a W2-G.

Greg -- any thoughts about teaming up with a Wisco Indian casino?