Tax Question

[mars]

From what I understand,if I win a $1.00 exotic bet for $1000 and the ticket cost $100 to construct,I would have to pay taxes on $999 even though the net profit was $900.

My question is,if I make the same wager on a $1.00 exotic bet and the ticket cost $100 to construct,But I Lose,can I deduct the full $100 ticket against my wins on my tax return or is my deduction limited to the $1.00 base price of the ticket ?

[HalvOnHorseracing]

From what I understand,if I win a $1.00 exotic bet for $1000 and the ticket cost $100 to construct,I would have to pay taxes on $999 even though the net profit was $900.

My question is,if I make the same wager on a $1.00 exotic bet and the ticket cost $100 to construct,But I Lose,can I deduct the full $100 ticket against my wins on my tax return or is my deduction limited to the $1.00 base price of the ticket ?
You can deduct losses up to the amount of your winnings. Save your tickets or keep a record in case of audit.

[mars]

You can deduct losses up to the amount of your winnings. Save your tickets or keep a record in case of audit.

Thank You.....

[Fox]

From what I understand,if I win a $1.00 exotic bet for $1000 and the ticket cost $100 to construct,I would have to pay taxes on $999 even though the net profit was $900.


At the time of cashing the ticket, they would withhold on $999. At tax filing time, you can deduct as a loss the other $99 that was part of the same ticket.

[Winger]

At the time of cashing the ticket, they would withhold on $999. At tax filing time, you can deduct as a loss the other $99 that was part of the same ticket.


If you don't itemize your deductions, it's a bum deal.

[Fox]

If you don't itemize your deductions, it's a bum deal.

'tis true.

There was some recent news about possibly revising the withholding rules to use the full ticket price (not just winning bet amount) as the basis amount for calculating the profit subject to withholding. Not sure if it legislatively made any progress though. Horseplayer relief isn't exactly on top of the national agenda.

[mars]

At the time of cashing the ticket, they would withhold on $999. At tax filing time, you can deduct as a loss the other $99 that was part of the same ticket.

Thank you...

[EMD4ME]

At the time of cashing the ticket, they would withhold on $999. At tax filing time, you can deduct as a loss the other $99 that was part of the same ticket.

They would withhold for a $999 ticket???? Are you in a country outside of the US?

[mars]

They would withhold for a $999 ticket???? Are you in a country outside of the US?

Yeah,when I hit a $1200 pick 6 TVG withheld nothing.So my question still stands...

Can you deduct the full price of an exotic ticket wager loss of $100 or just the base ticket price of $1.00 ?

[Fox]

They would withhold for a $999 ticket???? Are you in a country outside of the US?

If you do a $1 tri box with 3 horses costing $6 and you hit the winning combo that pays $1000 for $1, the withholding would be based on the $999 profit for the $1 combo that hit and not the actual $994 profit of the actual ticket that imcludes the other 5 combos. The $5 lost on the other combos can be itemized when you file.

I am not a tax pro and could be wrong so please correct me if I am mistaken.

[Actor]

You win $1000. The ticket cost you $100. The winning bet cost you $1.

They withhold 20% of $999 which is $199.80 - Figure they will round that up to $200.

$900 of actual profit goes on line 21 of Form 1040 (or is it line14? Ask your tax man).

The $200 withheld will be part of the total on line 64 of Form 1040. You should get a 1099 or something.

Verify all this with your tax man.

[NorCalGreg]

They would withhold for a $999 ticket???? Are you in a country outside of the US?

.... some of the people trying to help this poor guy---don't seem to have ever won any money.

If you itemize...you total up your signers, which tell you the winnings minus the base wager--put that exact amount down.

On the next line, put that SAME amount down as gambling losses.

Unless you have many thousands of dollars in DOCUMENTED WINNINGS--the IRS isn't going to waste their time on you. It's not cost efficient for them-- since most small-time gamblers are losers.

And like Winger said...if you don't itemize--it all goes into your total income for the year, same as if you got a paycheck for that amount.

[EMD4ME]

If you do a $1 tri box with 3 horses costing $6 and you hit the winning combo that pays $1000 for $1, the withholding would be based on the $999 profit for the $1 combo that hit and not the actual $994 profit of the actual ticket that imcludes the other 5 combos. The $5 lost on the other combos can be itemized when you file.

I am not a tax pro and could be wrong so please correct me if I am mistaken.

Yes you are correct except for the withholding part of your post. Withholding is taken when you collect $5,000 on a bet (or when betting with an ADW-on multiple tickets that are paying $602 AND collected over $4999.99 on the same bet).

Anything between $602 and $4999.99 is a W-2G. You need to report it as income but there is no withholding.

[EMD4ME]

.... some of the people trying to help this poor guy---don't seem to have ever won any money.

If you itemize...you total up your signers, which tell you the winnings minus the base wager--put that exact amount down.

On the next line, put that SAME amount down as gambling losses.

Unless you have many thousands of dollars in DOCUMENTED WINNINGS--the IRS isn't going to waste their time on you. It's not cost efficient for them-- since most small-time gamblers are losers.

And like Winger said...if you don't itemize--it all goes into your total income for the year, same as if you got a paycheck for that amount.

I will add: If you live in NY or NYC it sucks for you. Depends on your state.

You can write off all your gambling W-2 G's with gambling losses (if you lost) but NYC/NYS doesn't allow you to do the same (like the Fed Gvt).

I end up paying over 2-3% on all of my W-2G's a year because of this.

Very annoying :bang:

[EMD4ME]

Yeah,when I hit a $1200 pick 6 TVG withheld nothing.So my question still stands...

Can you deduct the full price of an exotic ticket wager loss of $100 or just the base ticket price of $1.00 ?

You're ticket cost you $1 in the eyes of the IRS in this case (in terms of calculating IF withholding would be taken AND if it's a w-2G).

Some people argue that I bet $100 got back $1200. Thats 11/1. Why is there a W-2G provided? Well that's because the laws are antiquated.

Now, in terms of deduction. Yes, you can deduct the full cost of $100 as if that was your only bet this year, you bet $100 and got back $1200 in W-2G's.

If audited, you must have clear yearly numbers and proof of all your gambling.

I obviously buy formulator and have credit card statements proving that I buy it monthly. I have 1000 witnesses that see me on track all year.

I make some bets outside of an ADW. I keep those tickets. It's important to keep programs etc.

That way if you're looked at, they know you're not some money launderer and otherwise.

Bottom line, DONT WORRY. You hit for $1200. If you lost it back, just write it off.

You will owe the FED nothing.

You might owe your state $12-$36 bucks IF you are not allowed to fully deduct the loss on your state/city return.

If you can't itemize on your federal return, for individual reasons, then you have a problem as you will treat that $1200 as earned income (like a paycheck).

[AndyC]

....Some people argue that I bet $100 got back $1200. Thats 11/1. Why is there a W-2G provided? Well that's because the laws are antiquated......


What is antiquated is the idea that winning odds should have anything to do with signers. A person who bets $10,000 on a 4-1 horse can win $40,000 with no signing but a person who bets $1 and wins $602 has to sign.

[mars]

You're ticket cost you $1 in the eyes of the IRS in this case (in terms of calculating IF withholding would be taken AND if it's a w-2G).

Some people argue that I bet $100 got back $1200. Thats 11/1. Why is there a W-2G provided? Well that's because the laws are antiquated.

Now, in terms of deduction. Yes, you can deduct the full cost of $100 as if that was your only bet this year, you bet $100 and got back $1200 in W-2G's.

If audited, you must have clear yearly numbers and proof of all your gambling.

I obviously buy formulator and have credit card statements proving that I buy it monthly. I have 1000 witnesses that see me on track all year.

I make some bets outside of an ADW. I keep those tickets. It's important to keep programs etc.

That way if you're looked at, they know you're not some money launderer and otherwise.

Bottom line, DONT WORRY. You hit for $1200. If you lost it back, just write it off.

You will owe the FED nothing.

You might owe your state $12-$36 bucks IF you are not allowed to fully deduct the loss on your state/city return.

If you can't itemize on your federal return, for individual reasons, then you have a problem as you will treat that $1200 as earned income (like a paycheck).

:) Thank you

[ultracapper]

Yes you are correct except for the withholding part of your post. Withholding is taken when you collect $5,000 on a bet (or when betting with an ADW-on multiple tickets that are paying $602 AND collected over $4999.99 on the same bet).

Anything between $602 and $4999.99 is a W-2G. You need to report it as income but there is no withholding.

Thank you. This was starting to drive me crazy. They REPORT on the 300/1, $600 criteria. They WITHHOLD on the $5,000 criteria.

[EMD4ME]

Thank you. This was starting to drive me crazy. They REPORT on the 300/1, $600 criteria. They WITHHOLD on the $5,000 criteria.

You're welcome. To be clear, this all based on a 1 unit wager. For example: Collected $650 on a .50 pick 5 or .10 super etc.

If you bet $1000 to win and collect $6,000 there's no W-2G or withholding as there wasn't 300-1 odds (at a minimum of $602) on your winning ticket.

Some people get all this confused understandably. If you bet .10 cold on a super and it pays $50 for a dime, it's 500 to 1 BUT it's not $602.00.

If you bet a $4 pick 4 and it pays $3000 for $2. You collect $6,000. Even if you have it on seperate tickets (.50 X 8), you will be subject to withholding (25% where I am) IF you bet via an ADW. If you bet on track, you can cash each ticket seperately and not have withholding (but will have 8 w-2 G's at $750 each).

[EMD4ME]

:) Thank you

Anytime! Remember, it's a great problem.

Reminds me of people who complain about getting a bonus at 48% tax rate. Who cares? You get it back one day.

[MutuelClerk]

The system is awful. I've written up many people who cash P6's and spend thousands, only to have the P6 chalk out and pay 1000.00 or less. You lose money on the punch and still have to sign. Archaic.