Replying to 2 posts in brackets below:
In a message dated 3/7/2012 7:35:39 A.M. Pacific Standard Time,
vpFREE@yahoogroups.com writes:
_Re: FYI Citibank issuing 1099 for air miles & 1099s for casino prize _
(http://groups.yahoo.com/group/vpFREE/message/119739;_ylc=X3oDMTJzc2lodHRiBF9TA
zk3MzU5NzE1BGdycElkAzQ2NDEwMTcEZ3Jwc3BJZAMxNzA1MDY1NzMyBG1zZ0lkAzExOTczOQRzZ
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Posted by: "vp_wiz" _harry.porter@verizon.net _
(mailto:harry.porter@verizon.net?Subject=
Re:%20FYI%20Citibank%20issuing%201099%20for%20air%20miles%20&%201099s%20for%20casino%20prize) _vp_wiz _
(http://profiles.yahoo.com/vp_wiz)
Tue Mar 6, 2012 2:56 pm (PST)
.
.................
I'm willing to bet the article is inaccurate. (For that matter, your
analogy doesn't hold water either.)
<<<<<< I'll defer to your accounting expertise here since this isn't the
point I wanted to make.>>>>>>
...................
As far as OP's "analogy" -- There have historically been tax advantaged
investments that were structured so that they generated sizable expenses on
an accrual basis that weren't matched by actual cash outlay, so that for the
taxpayer qualified to capture those accrued losses, the investments
generated a potential cash influx up front. While in theory there should be an
eventual recapture of those tax payments with subsequent tax liability, the
issue is that the investments in essence effected a free loan from the IRS.
The IRS has since cracked down on the deductibility of such expenses.
<<<<<< The most significant changes occurred in the Tax Reform Act of
1986. In 1985, I finished a class on tax shelters & this act obviated
everything I learned. >>>>>>
This is in no way analogous to the situation here. Again, I'll emphasize
in this case there's no unusual tax break for Citi to be realized at all.
As far an any recipient of a 1099 involving an inflated market valuation
of property, they should take appropriate steps to document a more realistic
value and file on that basis. (I don't have sufficient experience with
this to comment further.)
<<<<<< This is the point I wanted to make: "take appropriate steps to
document a more realistic value and file on that basis." >>>>>>
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_Re: FYI Citibank issuing 1099 for air miles & 1099s for casino prize _
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Posted by: "walterhnri@aol.com" _walterhnri@aol.com _
(mailto:walterhnri@aol.com?Subject=
Re:%20FYI%20Citibank%20issuing%201099%20for%20air%20miles%20&%201099s%20for%20casino%20prize) _walterhnri _ (http://profi
les.yahoo.com/walterhnri)
Tue Mar 6, 2012 3:24 pm (PST)
Glen,
This happened to me in 2009 at the Peppermill where I won a Mercedes E-350
in a drawing. The window sticker was $62K. My CPA instructed me to
immediately go to a car club on-line (like Costco) and request a quote for
the
identical new car model from a local dealer. I was able to use the lowest
written quote to reduce the basis for the income tax by about $5K.
Walter H in Florida
<<<<<<< I remember this well since it was up on Peppermill's ad boards
for months afterwards. When I asked what you had done with it, I was
surprised to hear that you had driven it back to Florida. I've also had the
pleasure of being in Walter's company when he was dealt a royal on a 100--play.
What was even more amazing was his royal count on that trip was something
like 120 & rising. I did not stay to find out how high it got because he was
sucking up all the royals!
Re 1099 wins, here's what I've done on some of them:
1. Harley-Davidson motorcycle: as soon as I won it, someone in the
audience asked if I wanted to sell it. Yes! That night I still searched the
Internet to come up with market-value documentation just in case the deal fell
through. The next day went to my bank with buyer, had crude bill-of-sale
drawn up, took his check, bank cleared it, went to dealer & gave buyer
original title. Kept the paperwork on market value & bill-of-sale just in case it
ever came up with IRS. Received 1099.
2. Car with sticker value of $35K. Casino gladly converted it to $40K of
free play over 12 months. Yes, I did record all sessions & reported it. I
know the alternative is to play through the free play only without a card but
I sleep better doing it my own way. No 1099.
3. 2-year lease on any car on lot. Tried to talk dealer into converting it
to down payment on a sale. Dealer offer wasn't much better than cash from
casino so took cash from casino. Easy-to-report 1099 because it was cash.
4. 7-day NCL cruise to any of destination in Alaska, Caribbean or Mexico.
Didn't want cruise so talked to travel agency about using it as credit for
a trip that I did want. Didn't research the cruise value, but when travel
agency heard what I wanted to do & to purchase an upgrade, they gave me a
$7K credit which was fine with me. Used it to purchase a $10K Rocky Mountain
train trip. Received a $7k 1099 which was fine since it felt like a good
value compared to a cruise that we weren't going to take.
5. $3500 (retail) HDTV. At time of receipt FMV was below $3000, in 6
months it was $2500. Took 1099 at full value & didn't bother to look for
documentation on lesser FMV. My losses that year covered it.
These probably were over the last 10 years & I've received several items
where I do the research & get documentation if I get any non-cash 1099.
When I blog, I like to write stream-of-consciousness (?) style if that's
the write term. But I need to put this as a separate paragraph to denote
this is a separate from the 1099s. When going to shopping sprees, like
Harrah's Great Gift Wrap Up (GGWU), it's important to bring a cell with Internet
capability so that you can research the value of items. For instance, I had
some items that I've been wanting to obtain the last 2 years but both times
ended up with free play since the conversion rate made the items
overpriced using points. >>>>>>>>>>>>>>>>
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