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Posted by Geoff on August 10, 2007, 2:03 am
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> webmas...@onfirebikinis.com wrote:
>>> webmas...@onfirebikinis.com wrote:
>>>> Recently the IRS notified me that they changed my 2005
>>>> return. They took my gambling winnings of $60,000, which I
>>>> had indicated on line 21 (Other Income), and decided to call
>>>> this self employment income. The result is a new tax bill
>>>> of $8,000.
>>>>
>>>> IRS specifically states in their tax guide that gambling
>>>> income is to be stated on line 21. Thus, how can they now
>>>> justify calling this self employment income when I did
>>>> exactly as they reference in their tax filing instructions?
>>>> Moderator:
>>>> File an amended return with the 60K on Schedule C and
>>>> deduct your expenses related to earning this income. The
>>>> IRS may reclassify this back to line 21.
>>> Go a step further, if it is to your benefit, amend the last
>>> two returns taking gambling losses on a Schedule C. That may
>>> help put it in perspective for them.
>> Thanks again for the responses. On line 21 I did indicate
>> that it was "gambling winnings". The 60,000 total is what I
>> won from sports betting, mostly football, after subtracting
>> wins and losses.
> I think you are still missing the point. What is supposed to
> be entered on Line 21 is the gross amount of WINNINGS, not
> the net of your wins and losses. Losses can only be claimed
> as an itemized deduction on Schedule A (if used).
So every bet you win is profit on line 21. Every bet you
lose is an itemized deduction?
You have to be mistaken; the paperwork would be literally
impossible.
Moderator:
Isn't "paperwork overload" part of the tax system? <g>
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