Client and 7 friends pooled equal amounts to bet on a lottery ticket, something they do on a regular basis. They won about $300K. Client signed for the money and the W2G was in his name. Tax was withheld @ 25% and the client distributed the winnings deducting a proportional amount of tax.
Now client owes a large sum of money, because his SS got taxed and his other income got taxed at the higher marginal rate.
Can he issue 1099's to his friends as nominees showing the proportional income and tax withheld? Or is there anything else that might be done?
Now client owes a large sum of money, because his SS got taxed and his other income got taxed at the higher marginal rate.
Can he issue 1099's to his friends as nominees showing the proportional income and tax withheld? Or is there anything else that might be done?
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