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Old September 25th, 2006, 11:52 AM
dmcrews4202 dmcrews4202 is offline
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Join Date: Sep 2006
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Oh dear....

By law...every penny you earn should be reported as income, regardless of source: wages, salary, interest, investments, tips, gambling winnings, fair market value for gifts....everything....

For gambling winnings, you should keep track of all your gambling losses as well, since gambling losses can offset winnings, no matter how large/small. If you win a $20,000 jackpot, but rack up $20,000 in losses over the year (naughty you), you don't owe a penny of taxes on the jackpot. (although you might have had some witheld by the IRS, and will be owed a refund). These losses are for general gambling, not the same game. So you could hit a lottery jackpot, and still deduct the purchase of all tickets, blackjack, poker and slots. However you must keep very good records should the IRS choose to audit your records.

That is the law...it is up to each individual how important it is to follow the law. (In practice a very many things go unreported)

Of course, failing to report income is really only a sticky legal issue if you are then audited.

Now...something else you might want to be aware of. Since the events of 9/11/2001, federal regulations on financial institutions have considerable tightened. Your bank is required by law to report any large transactions (say a $10,000 deposit for example). If you do win a large amount, and elect not to report it as income, you should also keep in mind that the IRS might have been informed by your bank of a large deposit even though the ship/casino did not have to report it.
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