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I have money in Bahamas bank. I owe money to two friends as

Customer Question
I have money in Bahamas...
I have money in Bahamas bank. I owe money to two friends as partners in a
lottery winnings in Africa. I am US citizen. I will pay them in Bahamas. Do
I pay taxes on the total amount or the net after I pay them that I bring to my home
in US?
Submitted: 2 years ago.Category: Tax
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10/24/2015
Tax Professional: emc011075, Tax adviser replied 2 years ago
emc011075
emc011075, Tax adviser
Category: Tax
Satisfied Customers: 3,336
Experience: IRS licensed Enrolled Agent and tax instructor
Verified

Hi. My name is ***** ***** I will be happy to help you.

As US citizen you report your worldwide income, including lottery winnings, regardless where the money are currently located. It is not transfer to US that makes it taxable, it is the it the type of income - lottery winnings - that IRS classify as taxable income.

That being said, if all three of you were lottery winners than you only report your third. However if you were the winner and decided to share it with your friends, you will have to report the entire amount as income to you. The money you decided to share with your friends will be treated as a nondeductible gifts.

Let me know if you have any questions.

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Tax Professional: emc011075, Tax adviser replied 2 years ago

I see you read my respond. Do you have any questions? Is there anything else I can help you with today?

And if this answered your question, please take a moment to rate my response so that I may receive credit for assisting you today. However, if you need clarification, or want to discuss this issue further, let me know. Thank you.

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