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Since there is no avenue small winnings at the

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Since there is no avenue...
Since there is no avenue for reporting small winnings at the Horse Races, is one required to record and pay taxes on small Horse Race winnings won over the Internet?
Submitted: 2 years ago.Category: Tax
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5/24/2015
Tax Professional: Lane, JD, CFP, MBA, CRPS replied 2 years ago
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 12,876
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
Verified
So sorry, (please don't shoot the messenger here) but yes ... ALL gambling winnings are SUPPOSED to be reported.
IRS taxes ALL (what they call) net increases in wealth; gambling winnings, sweepstakes winnings, bartering gains (trading a 1000 motorcycle for a 5000 car, etc., etc)
You might remember the news piece about the winners of Oprah's give-aways (sometimes cars) being taxed on those prizes as income.
Now, is there any way to track this? ... and could the numbers be so small that IRS will not pursue it (they call this Di Minimis amounts - more costly to pursue than the tax revenue it generates).
No, no way to track, and sometimes not worth it to them anyway.
But yes, technically, the tax law calls this a taxable net increase in wealth.
By the way, you can ALSO deduct your losses UP TO the winning amount (wiping out the winnings if you had enough losses IF you itemize and file a Schedule A.
You're supposed to report gambling winnings on line 21 of your tax return (other income).
Here's the IRS guidance on this:
http://www.irs.gov/taxtopics/tc419.html
Let me know if you have questions...
lane
I hope you'll rate me (that's the only way we get credit for the work here) based on thoroughness and accuracy, rather than any good news/bad news content ... Hopefully, having all the facts will help you "see around some corners."
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Lane
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 12,876
12,876 Satisfied Customers
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986

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