I just returned from a trip to Asia and bought some lottery tickets. As expected I didn't win a dime. I got to thinking though, if I had won, would I have had to claim it on my federal income tax? Just wondering, does anybody know? Thanks.
2007-01-11 01:54:03 · 5 answers · asked by Julie A 3 in Business & Finance ➔ Taxes ➔ United States
The US is the only country in the world to continue to tax its citizens and residents even when they leave. In order to exclude foreign income, you need to meet certain requirements. These include being outside of the US at least 330 days during a 365 day period, or being outside of the US for a full US tax year (January 1 - December 31). You also have to have your tax home outside the US, which means that in the foreign country, you are not claiming to be a nonresident, and therefore not subject to tax in that country.
Finally, and most importantly, the exclusion is called the "Foreign EARNED Income Exclusion", which means only earned income from a trade or business (being an employee means that is your trade or business) qualifies for the exclusion. Lottery winnings are considered unearned income, so that will not qualify for the exclusion, nor investment income such as interest and dividends. You will be able to avoid double taxation if the country taxed you on the lottery winnings, you could claim that tax as a credit against the US tax on the same income.
2007-01-11 03:58:58 · answer #1 · answered by jseah114 6 · 0⤊ 0⤋
If you are a US citizen your worldwide income is subject to tax liability. There are some rules that allow you to exclude some foreign income but they do not appear to apply to the situation you have offered.
2007-01-11 02:03:08 · answer #2 · answered by ? 6 · 0⤊ 0⤋
Any income earned from any source in the world is taxable income. Gambling earnings are reported on Schedule A, line 21.
If you lived abroad, and meet certain requirements, you could be exempt.
2007-01-11 02:02:37 · answer #3 · answered by M O 6 · 0⤊ 0⤋
leave the money you made there for five years - live there for that period time, yes you can visit this country. Not paying these taxes has a fair chance of not getting caught - for the most part we are on the honor system - so emmulate our elected officals from congress to school boards and you will know what the correct things is. Enjoy your money
2007-01-11 02:25:03 · answer #4 · answered by Anonymous · 0⤊ 1⤋
yes. Income is income
2007-01-11 02:42:36 · answer #5 · answered by vegas_iwish 5 · 0⤊ 0⤋