Can anyone tell me the tax implications of free play and promo chips? Taxed on full amount, just what you win with it, or not at all (other than what we always report that is)?
Hmmmmmmm. Doesn't look like you're going to get a response unless you received a PM or two. That's a shame because I'd like to know the answer(s), too, and it's a good bet there are others in the same boat. Funny-money payoffs are 100% of the reason that I have not ventured down to Tunica or Biloxi and nearby areas. There's this oddball, off-the-wall notion that if I have to pay real $$$ to enter a BJT, then I'd expect to be paid the same way. Silly idea, isn't it?
?????? I too, was hoping leilahay would get responses to her question. I have NO idea what the answer is and I'm guessing most tax "experts" would scratch their head on this one. Billy C
You're likely asking about the reporting that occurs, not the taxability of the income. On the occasions that I have won promo chips, there have been no W2-G or 1099 forms issued. After you play through the chips whatever win you generated will be taxable income, just like every other dollar you win at the tables or elsewhere.
Thanks Ken. Specific situation was win in video poker tournament, paid in promo or free play. Took freeplay, played on $5 9/6 jacks in high limit and did pretty well--108%. Since I do a schedule C, obviously I do report, but my accountant wanted to know about 1099 or W-2 G for estimated tax purposes. Now I know what to tell her. Btw, found out that straight flush on those machines only pays 239, instead of 250, therefore, no W2.
This is fairly common in video poker because of the lack of necessity for a W2G for a 239 coin payoff on a $5 machine (239 x $5 = $1,195). That is also why full-pay PickEm pays 1199 coins for a straight flush, just in case the game was dollars.
Congrats on your good fortune. That's a good "trade off" on the straight flush for most people------maybe not for you (depending on residency) Billy C
Vouchers and taxes Since it is about tax season, I am trying to find out if anyone knows how "Play until you lose" vouchers are reported by the casino, since you have to play them to actually win. Does anyone know how this is handled. I have won a few events before and did not receive a 1099G for the winning, but 2 to 3 years later the IRS did send me notification of additional tax due because it was reported, but these were cash awards.
