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Horse racing tax question

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  1. mikechr23 mikechr23 is offline

    White Lake, MI
    United States

    Posts: 109
    Joined: Jan 07

    Jun 4th, 2010 (6/4/2010 10:36pm)

    my friends and I pooled some money together to bet on the Preakness. we hit a trifecta for around 7k on a $5 bet. Is there anything we can do about the taxes, other than just have one person get a w-2 when they cash in the ticket and payout less to everyone else, and have the person who cashed it in claim all the winnings on their taxes next year. None of us usually bet on horses so using previous or future losses to negate the winnings is not an option.
     
  2. Tread Tread is offline

    Vaduz
    Liechtenstein

    Posts: 6,929
    Joined: Jun 05

    Jun 4th, 2010 (6/4/2010 10:41pm) in reply to mikechr23

    There is nothing you can do, anything over 5K they will withhold 25% on the spot and you will definitely get a W-2 G. I run pools alot and we just split what is left after the taxes. Make sure you check about state tax liability too, in Ohio you cant write it off even if you have losers, which is hellaweak.
  3. norcaljeff norcaljeff is offline 2010 OT Thread Kill Leader

    San Francisco, CA
    United States

    Posts: 36,709
    Joined: Sep 07

    Jun 4th, 2010 (6/4/2010 10:43pm) in reply to mikechr23

    next time make 5 $1 bets?

    edit: you could try asking in that tax forum, if it's still around. imo
    Edited By: norcaljeff Jun 4th, 2010 at 10:43 PM
  4. Tread Tread is offline

    Vaduz
    Liechtenstein

    Posts: 6,929
    Joined: Jun 05

    Jun 4th, 2010 (6/4/2010 10:46pm) in reply to norcaljeff

    This is usually a better option, but even here you are getting back like 1.4k per $1 bet and will get a W2G. Anything over $600 on a $1 bet gets a W2G. The difference is, they will not withhold and you will get the entire amount back, but will have the tax liability unless you have losers to offset. And if you collect a bunch of wadded up tickets with trash all over them, the IRS might not buy your story. But do remember that you can use ANY gambling loss to offset that, but that assumes that overall your entire gambling functions had you down for the year, and you had better keep records in case of an audit.
  5. mikechr23 mikechr23 is offline

    White Lake, MI
    United States

    Posts: 109
    Joined: Jan 07

    Jun 4th, 2010 (6/4/2010 10:58pm) in reply to Tread

    Thanks for the responses. I've been telling them that we just need to cash it in and pay the taxes, but they have been putting it off, thinking there was a way around it.
     
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