Harry wrote:
>007's suggestion that one might net losses against the w-2G total runs counter to direct IRS guidance that a casual gambler can't directly reduce reported gambling winnings with gambling losses
I suggested it as a possibility, but I agree that it's not the best
way to do it. My extensive experience with it is that it doesn't run
the risk of being audited, but only being asked to clarify, which is
usually motivated by the shock of first being asked to pay a tax bill
which is based on including all the w-2gs and none of the losses. But
"direct IRS guidance" isn't necessarily the best way to do things,
either, both regarding what is profitable and what's easiest. When I
first learned how to treat form 5754s, which are used to handle the
situation of a player hitting a jackpot for someone else, I was told
to have the person whose income the jackpot is sign it and give it to
the player who hit the jackpot. I did that for decades, before and
after finding out that the IRS doesn't want it done that way, with no
questions being asked. The few times that I did it the way the IRS
says it wants it done, which is to have the player who hit the jackpot
sign it, take it back to the casino, and have the casino reissue a
w-2g in the name of the person whose income it is, with one exception,
I met with all kinds of unnecessary problems, including the casino
refusing to do it. In another area, I only recently learned on this
forum that I was doing something wrong for years, but the IRS never
questioned me about it. I did something else wrong for a few years
and had 3 different responses from the IRS, from nothing, most years,
to having to pay the entire bill plus penalties, one year, to
something in between. Unless you go out of your way to cheat, there's
not a lot of downside to not going to a lot of trouble to do it the
"right" way.
Posted by: 007 <007@embarqmail.com>
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