Writing off losers

[Sekrah]

Question... You can write off any winnings with gambling losses at tax time correct??

[ranchwest]

There was recently a big thread about this. Gambling must be your business. You must conduct it as a business, complete with accurate records.

[Sekrah]

Okay I was just curious

Because I hit a big winner over the weekend for a little over $1800 (Trifecta in the 2nd at Delaware on Saturday).

A couple older gentlemen noticed my excitement at the OTW... The one ran a line past me that for $100, he would cash the ticket for me.. He said he didnt have to pay taxes because he was disabled.. and he kept repeating over and over again how I would have to pay 28% and it would be so much easier if I just let him do it. He also kept repeating that IRS doesn't take losing tickets anymore as writeoffs....

I am rather young at only 19, and probably a pretty good target for him to take advantage of.

Well, I was smart enough not to let him do it because once I give him my ticket, it's not mine anymore.. so I'm not that stupid.. and cashed it myself..

Just brought up an interesting thought.. Are gambling losses accepted as writeoffs by the IRS? Because this jackass said they werent.

[crackers@NOLA]

Gambling winnings are deductible up to the amount lost. Can't write off more loses then you have in winnings. If audited you could have to produce a program along with losing tickets.

[GR1@HTR]

Yeah, I've been offerd that to. If it is someone you trust, it is a great deal. Even paying them 10% is a great deal!!!

[David McKenzie]

// Gambling winnings are deductible up to the amount lost. Can't write off more loses then you have in winnings. If audited you could have to produce a program along with losing tickets. //

Even then, the IRS can say one word and your losing tickets and meticulous records are worthless, "Disallowed." Yes, you can then fight it in court, but you better make sure you can document EVERY bet you've deducted.

// Yeah, I've been offerd that to. If it is someone you trust, it is a great deal. Even paying them 10% is a great deal!!! //

It's illegal. I suggest a modicum of reserve is appropriate. I know of one IRS agent that frequents our OTB. He's a nice guy and a good handicapper. He's also not *after* anyone, but don't scream like a lunatic having someone cash your ticket, it's sort of like rubbing his nose in it. He *has* to go after you then or it's his butt on the line. Capeesh? Income tax evasion is a serious offense not to be taken lightly.

[GR1@HTR]

I agree. Tax evasion is wrong. But who ever signs the 1099 is liable for the taxes.

[karlskorner]

Had a friend (now deceased) who had a unique thing going.
He "bought" your ticket. Always carried 10k with him. Would ckeck the ticket to make sure it was 'legit", went to the bathroom and counted out the monies, less his 10%. You as the original owner now did not own the ticket, you got your money up front.
He very seldom cashed more than 1 ticket a race, unless it was from the same clerk or the one next to him. IRS or security could pin him down. He owned the ticket. Over the years I have seen 50-60K IRS refunds sent to him. If the tickect was over 10k, he went to his car, and conducted business when he came back.

Karl

[ranchwest]

Originally posted by karlskorner
Had a friend (now deceased) who had a unique thing going.
He "bought" your ticket. Always carried 10k with him. Would ckeck the ticket to make sure it was 'legit", went to the bathroom and counted out the monies, less his 10%. You as the original owner now did not own the ticket, you got your money up front.
He very seldom cashed more than 1 ticket a race, unless it was from the same clerk or the one next to him. IRS or security could pin him down. He owned the ticket. Over the years I have seen 50-60K IRS refunds sent to him. If the tickect was over 10k, he went to his car, and conducted business when he came back.

Karl

I seriously doubt this procedure would be considered by the government to be any more legal than returning the money after the fact.

In addition to the direct criminal offense, there's also laws on conspiracy to commit a felony and other laws that might come into play.

My suggestion, be careful.

[karlskorner]

Ranchwest;

I am not certain that a fraud was commited. If the person who sold the ticket was willing to take a 10% loss, where was the conspiracy, he just sold his ticket. The IRS got their portion upon the cashing of the ticket, just not from the person who originaly owned it.

I always felt that because certain of his "clients" were established in govt. or business, nobody bothered him. like J. Edgar when he use to visit Hialeah. Someone else tried to open up "shop" upon his demise, never were caught, but were soon booted as undersirable under the private property law.

Karl

[ranchwest]

Karl,

Cashing tickets for someone else is illegal, primarily because you alter the original holder's tax bracket. Keep in mind that the amount immediately withheld may not be the amount due on the individual's tax return.

I'm not an attorney, but in most cases I've seen it wouldn't make any difference whether the money was exchanged in advance or after the fact. The original holder is avoiding or at least clouding the trail of his taxable income.

I'm not trying to preach here. I just don't want anyone to think that something is legal when it is very likely not legal. And, anyone involved could possibly be found to be in a conspiracy to commit a felony.

[pic6vic]

What if you do not itemize. Then you are stuck with the income, because you will lose your standard deduction by itemizing and not having enough to write off. Had a friend who was retires he had to have someone sign for him. In Southern Cal signing for
others is common place, however the government can nail you if you write too much off. There is a person named Jimmy the Greek,
I don't know his last name, but he would sign for as low as 4%. Someone got mad at him and reported him to the IRS. He spent 16 months in prison for tax evasion. Be careful keep records and then write off what you hadto sign for. Been audited 3 times and you can easily beat them.

[Tom]

Seems like buying the ticket is legal to me. The thing those bottom feeding IRS people might get him on is scalping!

[karlskorner]

Tom;

My understanding of "scalping" is if you buy a ticket (or whatever) at one price and sell it for much more, than it becomes scalping.
In this case the owner of the ticket is willing to sell it for 10% less than it's face value.

Karl