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Thread: 1099 tax question

  1. #1
    If you win a casino drawing and get a 1099 can you offset that amount from your losses as you would a w2g?

  2. #2
    No chimp, it's not considered a win via betting.

  3. #3
    Thanks Rob. That’s what I thought. But someone told me otherwise.

  4. #4
    Originally Posted by Chimp View Post
    Thanks Rob. That’s what I thought. But someone told me otherwise.
    Rob is correct Chimp. Years ago I won second place in a "complimentary" slot tournament in the Golden Nugget for $2,500 and got a 1099 and just reported it as income.

    One can argue that you would not even be in the drawing unless you had first gambled, but since you were issued a 1099 (as opposed to a W-2 G) it has already been reported to the IRS and there is not much you can do unless you can convince the casino to "correct" the 1099 and issue you a W-2 G instead. It may not be worth the effort unless you have connections with a casino decision maker who is willing to jump through some hoops for you.

    Was it a significant prize you won or is this just a hypothetical?

    FAB
    Last edited by FABismonte; 07-01-2019 at 10:03 AM.

  5. #5
    Hey Fab. It was significant. 100K (smiley face)

    I have not received anything yet. They said it would be mailed. But Iím assuming a 1099.

  6. #6
    Originally Posted by Chimp View Post
    Hey Fab. It was significant. 100K (smiley face)

    I have not received anything yet. They said it would be mailed. But I’m assuming a 1099.
    WOW! That is beyond "significant." Congratulations!

    Did you get paid in cash or check? If you ever run into a similar situation again, consider asking for payment by free play as opposed to cash. Playing free play once will probably not yield the equivalent to cash but it will not necessarily trigger a 1099 or W-2 G since the casino will not know how much to report to the IRS at the time the free play vouchers are given to you.

    FAB

  7. #7
    Some cash, some check. Thanks Fab.
    I also hit 25k the next morning on slot, so that will cover some of the taxes!

  8. #8
    I think gambling losses can offset prize winnings it you itemize.
    https://www.savantcapital.com/blog/t...rize-winnings/

    Consult a tax professional.

  9. #9
    Congrats on the wins! I think the best advice is the above to consult a tax professional. Just as an FYI in Jean Scotts latest edition (2019) of tax help for gamblers (a must read I feel for anyone w gambling income) she mentions the IRS has ruled that taxes from gambling on a 1099 can be offset by gambling losses.

    In the prior edition of her book it mentioned that 1099s were a grey area and u would get different answers from the IRS depending on who you talked to. So maybe this has changed but of course everything is very situational dependent.

    Not only should you use a professional, but a tax professional thats knowledgeable on gambling. Last year i used a regular tax service and they were a little confused about how to handle a W2G, they wanted to report it all as income even though last year I had a net loss.

  10. #10
    Thanks Midwest and DGenBen. I do use a professional. They always offset my losses. But only with W2g. I have not received a 1099 before. Interesting about Jean Scotts latest edition. I spoke with my tax guy earlier, who said I would have to pay taxes, but he is new to the firm and when speaking to him I could tell he clearly was not very familiar with gambling issues. The owner of the firm was not available but I will get in touch with him tomorrow. He has been doing my taxes for years. And good idea on a professional who has extensive knowledge with gaming.
    I will let you all know if I find out it is allowed to be offset.

  11. #11
    Chimp—there is some discrepancy in this issue. The definition of gambling as defined by the irs includes raffles. So if your win can be considered a raffle you should try to offset.

    If it was a sweepstakes, the irs does not consider it to be gambling.

    I have no idea what the difference is between a raffle and a sweepstakes, but irs is pretty much looking at whether any gambling took place, even as little as purchasing the ticket to take part in the raffle or sweepstake as opposed to your name being drawn from a drum. Of course one could argue that it was your gambling that got all those tickets with your name into the drum. One would lose that argument.

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  14. #14
    Can write off if filing as a professional, correct?

  15. #15
    1099 should be no different from a w2g
    I'll miss Alan's profound stupidity.

  16. #16

  17. #17
    It's just a way to report income regardless of the source.
    I'll miss Alan's profound stupidity.

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