100k to win...

[Danzig]

Originally Posted by eajinabi

Why wouldnt it? Its less than 600 times the base wager.

because he won a contest to begin with-he didn't bet his own money. but i wish i had the problem of figuring it all out.

[eajinabi]

Originally Posted by Danzig

because he won a contest to begin with-he didn't bet his own money. but i wish i had the problem of figuring it all out.

Probably only has to pay taxes on the 100k

[Travis Stone]

Very cool!

[Port Conway Lane]

Originally Posted by eajinabi

Probably only has to pay taxes on the 100k

Actually I think he will only have to pay taxes on gambling income of 800k and prize money of 100k.

[eajinabi]

Originally Posted by Port Conway Lane

Actually I think he will only have to pay taxes on gambling income of 800k and prize money of 100k.

I dont understand how he needs to pay taxes on the 800k he recieved from CD. He/NBC placed a 100k win bet which which ended up being only 8 times the amount of the base wager. IRS comes into place only if its 600 times.

I can see that he would need to pay taxes on the 100k prize money. Whatever it is, the guy did not have to put a single dime of his own money to win all that. Great win for him.

[Port Conway Lane]

Originally Posted by eajinabi

I dont understand how he needs to pay taxes on the 800k he recieved from CD. He/NBC placed a 100k win bet which which ended up being only 8 times the amount of the base wager. IRS comes into place only if its 600 times.

I can see that he would need to pay taxes on the 100k prize money. Whatever it is, the guy did not have to put a single dime of his own money to win all that. Great win for him.

The irs cannot track the type of income you are describing but when he gets a 1099 on the 100k that is a huge red flag.
Gambling income is supposed to be reported no matter how small. Most people don't report it and the irs doesn't persue small potatoes.

[Merlinsky]

Good news for him is someone at the IRS undoubtedly saw him win it. Enjoy that complimentary audit.

[smuthg]

IMO he should pay taxes on the 90,000.00 from NBC as ordinary income (which I believe with his $900k win puts him in the top bracket of I think 35%), I think he can treat the first $10k from NBC as a gift (and tax free)... So, once you get that tax situation squared away, I think he's paying 20% on the winning from the track (which is better than his ordinary income rate of 35%)... unless of course he's got $900k in losing tickets The best thing for this guy is that he lives in TX with no state income tax, so winning $800k on national TV shouldn't matter to his home state.

[Port Conway Lane]

Originally Posted by smuthg

IMO he should pay taxes on the 90,000.00 from NBC as ordinary income (which I believe with his $900k win puts him in the top bracket of I think 35%), I think he can treat the first $10k from NBC as a gift (and tax free)... So, once you get that tax situation squared away, I think he's paying 20% on the winning from the track (which is better than his ordinary income rate of 35%)... unless of course he's got $900k in losing tickets The best thing for this guy is that he lives in TX with no state income tax, so winning $800k on national TV shouldn't matter to his home state.

That sounds right.

[PeteMugg]

I thought if it was over a certain amount the IRS would step in to get their share regardless of how much was wagered. I'd bet they will be greeting him at the windows.

[2Hot4TV]

Originally Posted by eajinabi

Probably only has to pay taxes on the 100k

I would plan on paying on the whole thing. Nice problem to have.