my boyfriend won 18,000 but he didn't have the taxes taken out. someone told him to collect lottery tickets up to the amount he won an they will write it off as losses. he won thisd money in febuary 2006. is there any other way or is this true. please help we have about 6,000 or a little more then that in tickets.
2007-01-06 04:11:56 · 8 answers · asked by mattsgurl79 2 in Business & Finance ➔ Taxes ➔ United States
Did your boyfriend win this money in a contest or by gambling? If he won it in a contest (no cash wager was made), then he cannot deduct anything.
If he won it by gambling (lottery, slot machines, casino, a raffle, etc), then he can deduct other gambling losses, up until he has wiped out all of his winnings and if he has enough deductions to itemize.
He can collect his losing lottery tickets, as stated in previous answers, but that may not be as great as it sounds. 1st of all, he has to purchase all of those tickets. You can't find them in the trash can and claim they were yours. You also need to include ALL of your winnings. That means that he still needs to keep track of all of his $1, $2, $5 winning tickets and include those as winnings (to be added to that $18,000). It is a bit of a grey area because it is very difficult to prove that you actually bought a lottery ticket and that you won or lost. However, if he shows $18,000 in losing lottery tickets and claims that he bought them all, the IRS is going to assume that if he bought that many tickets, he had to have some winnings. Most state lotteries have about a 67% payback rate (for every $1 that is played, the lottery pays out $.67 in winnings). If your boyfriend tries to claim $18,000 in lottery losses, he will need to prove that he bought $53,700 in tickets for the entire year (the burden of proof falls on you in this case).
If he won the $18,000 gambling, and he does play the lottery, then he should keep track of his tickets (both winners and losers). If he gambles at a casino, and he uses a players club card, then he should ask the casino for a statement of his winnings and losses (this is easy to do if he plays slot machines or video poker). He also needs to find enough expenses to be able to itemize his deductions ($5,150 if he files single, $7,350 head of household, since he is your boyfriend, I doubt he will file married).
Unless he gambles a lot, he will probably have to pay some taxes on his winnings. He needs to file the long 1040 (not 1040A, 1040EZ), and he would have to include this on line 21 as other income.
2007-01-06 05:28:57 · answer #1 · answered by j-man 4 · 1⤊ 0⤋
Yes he can claim the $6,000 as a deduction if he itemizes on Schedule A. If he does not itemize he still pays tax on the $18,000 but does not get relief for the losses. Did he gamble anywhere else? Can he get details of those losses? Casinos are pretty good at things like that.
The only issue I see is that the IRS may want more than just tickets. They may want to know where he bought them. After all, he could just get his friends to give him their losing tickets.
Good luck with this. Hope it all works out.
2007-01-06 04:34:13 · answer #2 · answered by skip 6 · 1⤊ 0⤋
If you're collecting them from your friends, then what you're doing is illegal. If you're just looking through his house or apartment to find all the old tickets you can, then it's legal. You can only use the tickets for the same year when he won the money.
Also, deduction of gambling losses up to the amount of the winnings is an itemized deduction, so he will have to itemize to get it. Also, he will have to have an accurate diary of his losses and winnings. It must list at a minimum the date and type of the wager, name and address where he gambled or bought the tickets, and the names of other persons present.** This diary would have to show all of his winnings and losses. So if you're just trying to collect losing tickets from all his friends, the chances of being able to create this required "diary" are pretty slim.
2007-01-06 12:20:06 · answer #3 · answered by Judy 7 · 0⤊ 0⤋
The $18 grand is taxable income. ONLY if you itemize (Schedule A), you can deduct gambling losses UP TO the amount of the gambling winnings.
BEWARE! Collecting used lottery tickets MAY NOT be proof of gambling expenses. One sad story involved an audit of a lottery winner who "borrowed" a colletion of a million used lottery tickets to show the IRS agent thaty he spent a million bucks before he won the million dollar jackpot. The original collector ended up tattling to the IRS that the tickets he saw were "borrowed" from his collection; the lottery winner didn't buy them. In the end, the lottery winner paid some time in the federal penitentiary for lying to the IRS!
The WealthBuilder
Tax Specialist
2007-01-06 05:40:40 · answer #4 · answered by WealthBuilder 4 · 0⤊ 1⤋
You may deduct gambling expenses only if you itemize deductions. In other words, if you take the standard deduction, then the $18,000 is taxable in full. Otherwise, you'd be able to declare only your net winnings as income.
The IRS has a page on their website that explains taxation and gambling: http://www.irs.gov/taxtopics/tc419.html
2007-01-06 04:33:41 · answer #5 · answered by achue500 3 · 2⤊ 0⤋
he'll be taxed on 18 grand period.
2007-01-06 04:19:20 · answer #6 · answered by cork 7 · 0⤊ 2⤋
it is true...but that is shtload to collect...good luck
2007-01-06 04:14:32 · answer #7 · answered by Anonymous · 0⤊ 2⤋
wow...good luck!
2007-01-06 04:20:13 · answer #8 · answered by belle t 3 · 0⤊ 1⤋