Question on winning a prize...

[Just_the_facts]

Originally Posted by lurtsman

Are you certain about everything you posted?

My understanding was that a gambler had to register themselves as a gambler (at least in some states) to be allowed to write off any losses from gambling, and they were not allowed to write off any losses for the year exceeding their gains, so it was not possible to have a negative net income effect. I had no clue on carry over of losses from one year to the next.

You can claim gambling losses so long as you itemize, but they cannot exceed your net gambling income. Tax Topics - Topic 419 Gambling Income and Losses Gambling losses, unlike many other losses (such as net operating losses, passive activity losses, and capital losses) do not carry forward.

[oaktonite]

Here is some more overview-type information on the matter from the IRS, including links to the two most pertinent of its publications on the subject.

Gambling Winnings Are Always Taxable Income

[texdav]

Originally Posted by Slater

I'm not really sure if this belongs in this forum, but I wasn't sure where it fit. Anyway, a local casino routinely gives away new vehicles in drawings (Jeeps, etc.) as part of it's promotions. I would imagine this is common nationwide.

I always wondered about folks that actually won one of these vehicles - aren't taxes due on such a prize? And what if one can't afford the taxes? Does the casino reclaim the vehicle?

Kind of a basic question, but I was curious how the rules applied to these kind of giveaways.

Have a friend who won a truck. He had to pay taxes on the stated value of the truck which was MSRP. He was given temporary tags and had to pay tax in his country when registering the vehicle. He could have delayed paying tax tho and sold it himself but still tax based on MSRP.

[myrc60]

Originally Posted by texdav

Have a friend who won a truck. He had to pay taxes on the stated value of the truck which was MSRP. He was given temporary tags and had to pay tax in his country when registering the vehicle. He could have delayed paying tax tho and sold it himself but still tax based on MSRP.

Which is why the stated value of such prizes always seems inflated. Most people don't pay MSRP when they buy a car or other big ticket item.

I won a Nintendo 64 off the radio in 1997 and the station didn't want my SSN number because the value of the "prize" was too low to warrant a 1099 form. I never did include this prize in my income tax and now the SOL has expired!

[oaktonite]

So has the Nintendo 64. But at least you have the satisfaction of having been a tax-cheat.

[SOON2BNSURPRISE]

Two employees here at the hospital have won cars. One woman won a BMW at the Indian Casino north of here. She drove it for a year then sold it to pay her taxes on it. Another employee won a car on the prise is right and decided to keep the car. She paid the tax on it and still has it.