Man won $450,000. Wants to know if he can put his losses on return? Which HE says is $200,000. That much money he should have stayed home.
Don't they have to have proof of their losses?
Don't they have to have proof of their losses?
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SueBaby -
Yes they have to substantiate losses if the IRS asks, and in this case they likely will ask. If you do the return, make sure you give him a written statement concerning substantiation rules. Make sure that the winnings are on a W2-G, not a 1099-MISC, which are not gambling winnings but rather a prize and he cannot take gambling losses against a prize. Had that one just last week with a new client.Originally posted by SueBaby View Post"A man that holds a cat by the tail learns something he can learn no other way." - Mark Twain -
Yes, he has a W2-G but he insist to put his losses on his return and I really don't want to.Originally posted by taxmandan View PostSueBabyComment
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Remember, it goes on Sch A!Comment
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Record
If the IRS does check the log or records, they will also look for winnings not reported on W-2G to make sure that all the winnings are reported irregardless if they are reported to the IRS or they are not reported.Comment
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Never put something on a return that you aren't comfortable with. Ask him for substantiation on the losses and if he doesn't have any, tell him it won't be on the return. Gambling losses are an area of intense IRS scrutiny and not something where you as a professional can ignore the substantiation rules.Originally posted by SueBaby View Post
That amount of misc deduction on Sch A will likely trigger AMT, did you plug in his numbers and see what it does?"A man that holds a cat by the tail learns something he can learn no other way." - Mark TwainComment
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Yes, and it went through the ceiling. That is why he wants his losses on so it will go down. He is very loud, bossy, pushy, and I have til 7 tonight to figure it out. I guess that is what money will do to you.Originally posted by taxmandan View PostSueBabyComment
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Amt
Deducting the gambling expenses on Schedule A will cause the AMT to go up, not down.Originally posted by SueBaby View Post
If it is a W-2G from a Casino, you better report more than that item. You need to get one of those casino reports that shows ins and outs.
Also, for this amount, unless the person can substantiate in detail his expenses, then I wouldn't deduct them. If he insists, I would show him the door.
The IRS has information on substantiation required for gambling. I would print that out, give it to him, and give him the option to do or go out the door.Jiggers, EAComment
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You are right!!! I did not like this from the start. He never could stay on a "true" figure. And I asked for receipts and he says Who keeps them anyway? So thanks for your support at 7:00 I will do just that. I would rather be safe than sorry later on. He might have been rich for 15 minutes, but his personality I hated.Originally posted by Jiggers View PostSueBabyComment
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These are the type of clients who will have memory loss and point the finger directly at you when the buffalo chips hit the fan. What is more important to you, your professional reputation or one client? Tell him to take a hike!Comment
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Yes, I did not want my name on this . Thanks to all for my gut feeling to say NO WAY!Originally posted by jimmcg View PostSueBabyComment
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When I did tell him to take a hike. Boy was there a few choice words spoken (from him).Originally posted by jimmcg View Post
He was too wishy washy and didn't stick to one figure before changing it many times, but what really bothered me was not only his attitude and personality BUT he did not let his wife say one word the two times she was here with him.
What a jerk!! I could have made a lot of money from him but it was NOT worth it at all. Pity the person has to deal with him on taxes AND pity his wife to live with that. I sure am comfortable now. People out there still amaze me.SueBabyComment
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