QUESTION about winnings and taxes

[supadcy]

If someone were to recieve a fairly large check from an offshore book, yet had no intentions of declaring these winnings (hypothetically speaking, of course), would it be safe to deposit this into their own bank account. If not, what would one do?
Hypothetically....of course. Thanks for any reply!

 

[JSMOOTH]

As is my understanding.......
Any deposit to a bank account 10,000 dollars or more, gets immediatly reported to the IRS.

I personally, get cashiers checks, cash them and put the $ in a "safe place"

Keep in mind....the IRS knows about every and any account you have.

Of course, the smart thing to do is........
Keep out about 30% percent of your winnings and claim them on your taxes.

[This message has been edited by JSMOOTH (edited 04-16-2001).]

 

[Phanatic]

Get multiple smaller checks (under 2K each), cash them at a check cashing place, and put the cash in a safe deposit box. Don't give anyone a penny of your hard earned money that you don't want to have it!

 

[sandwedge]

if you are audited the IRS will go thru your bank statements with a fine tooth comb. even smaller deposits will likely draw scrutiny.

 

[The Big Tease]

Guys, I dont know a whole lot about taxes, but if you have to claim your winnings, can you write off your losses?? Im sure that is a dumb question, but seems kinda fair to me...

 

[yyz]

If you try to offset winnings by using your losses, you had better have very accurate records.

Too many people figure (wrongly) that if they win $8,000 at the track on a superfecta, they can collect $8,000 worth of losing tickets, show the whoile works to the IRS, and get off with no tax.

Try that move, and you will be audited in a heartbeat!

The first question the G-Man will ask is, "So, you are telling me you had $8,000 worth of losers, and only one winning ticket?"

Hide whatever you won offshore, and if you won something in the States, fess up and pay Sammy.

 

[marine]

I am not too sure on how much you are talking about, but if it is serious money you should probably consider opening up a foreign bank acct in the carribbean like Grand Cayman Bank or even a swiss bank acct.

again, this is only if you are talking some serious bucks here i would imagine. But it would relieve you of any tension or stress you have on the subject.

 

[Nick Douglas]

My dad works for the IRS and I deposit several thousand a year without reporting any. I do not endorse that anyone else do that, but here is what he told me to help me come to my decision.

First of all, the $10,000 rule is for CASH ONLY. I had to do that a few times when I worked as a bank teller as well. Fletcher or another high roller may be able to tell me more, but I think that if, say, you bet 5500/5000, when you collect that 10000 at the window in Vegas, it gets reported to the guv. Don't know that one for sure.

What I do know is that a *minute* percentage of tax returns are actually audited. Red Flags for auditing are generally returns without a W-2 or returns where claims are made different from a W-2.

My point is that if you have a job and you only gamble recreationally *in my opinion* (not according to the law) it is safe to not report your winnings. If you get audited you will have to pay back taxes on gambling winnings that are not reported but the chances of being audited are so incredibly small if you are square with everything else and you have an employer that I feel that it is not worth it to pay taxes on winnings every year.

Remember that audits can go back as far as seven years. Personally, I don't really spend much of my gambling winnings so I have enough in reserve to pay any back taxes in the EXTREMELY unlikely event that I was audited.

*Disclaimer* -- This in no way is to imply that it is legal in any way to let gambling income go unreported. If you do not report your gambling income you are breaking federal law. This is simply my view on the situation based on the realities of how the IRS performs audits and how they determine which taxpayers are to be audited.

 

[sandwedge]

another thing, if you declare gambling winnings on your tax return, make sure you have VERY thorough and accurate records to back up your wins and losses.

gambling losses may not be netted against wins, unless you are a professional gambler and file them on a schedule C (i think that's the one). losses are allowed as an itemized deduction. if you don't itemize you are out of luck, winnings count, losses below the standard deduction amount(4400 for a single taxpayer) don't.

 

[pepin46]

here is my two cents worth:

gamblings winnings may be offset by like gambling losses, meaning if you win 5,000 in football, you may not go to the track and pick up losing tickets and use them to offset that football win. you must show football losses.

of course, gambling is ilegal in itself, other than those sanctioned, or rather, monopolized, by your state, like those immoral lotteries (separate subject?).

the one thing i can tell you about our government, including the irs, is that if and when they come after you for whatever reason, you would wish you could disappear.

from a practical standpoint, though, the government would not be concerned about small time cheating, say something under 100 grand a year, unless you flaunt it (advertise it). keep that in mind, mj writers. i think i have read somewhere that a whopping 75% of taxpayers cheat one way or the other, some very discreetly, and some in excess.

the irs mission is to collect taxes, and that takes time and money, so they will probably not be concerned because someone blew the whistle that you failed to declare 5-10 thousand.

the 10 grand rule applies to cash and semi-cash, like bearer checks or checks endorsed in blank. in other words, any instrument that is negotiable by anybody is like cash, but a check made out to a specific name is not. unsigned travellers checks are like cash.


pep

 

[bigjoe]

dont tell them anything take the fifth