Irs

[hurrikane]

Anyone know for certain the exact rules concerning when winnings are reported to the IRS. I have heard about the 300=1 and the $600.00. Is the 600 figured on a 2.00 bet or is that total winning regardless of bet.

[George]

SMF answered your question on PA board. Reckon he doesn't want to register here.
Funny, I never post there because too lazy to register.

[MikeDee]

looked up and old article written by Barry Meadows in it he writes
"any ticket that pays 300-1 or more and returns at least $600 you need to show Id and fill out a tax form."


So I think it is total winnings regardless of bet type.

His advice is to play multiple $1 tickets on exoctics rather then $2 when a large payoff is possible. (Might stay under the min and avoid a signer)

[Glen]

Kinda off the topic, but signers almost suck....

Lets say you hit $750 signer. The track has already sucked out about 25% ($250) and the gov takes another 33% ($250). Thats $500 bucks gone bye bye...Leaves us with about 60% of what we are due...But if your pulling a Tommy C for $100K, that is another story...

[carl mckenzie]

Hi Guys,
I play in Ct. at the Bradely Teletheater which is owned by AutoTote and the procedure with the IRS at that faciltiy is any ticket paying 600-1 must fill out a W-2g form which of course includes your SS number. If your $1.00 ticket pays $5,000 or more they automatically take out 30% for Federal Witholding. The Feds will allow you to claim loses against wins but not to exceed your total winnings. You better have tickets to validate that claim in case of an audit.

State taxes is where you probably will be hurt tho. In Massachusettes you can not claim losses against winnings unless it is your sole source of income. If you do that you are almost assured of an audit. So if you live in Mass and have reported winnings they will be taxed at a rate of 5.76% and added to the due column on April 15th.

Don't know how other states work but they are all probably in a similar routine.

CARL MAC

[MikeDee]

There is a IRS thread over at the PA board and from the messages it appears that there is quite a varation in when you have to sign versus when you don't. It looks tracks are making their own interperation of the law and acting accordingly.

Oh is just like Ct. If you get a w2 you have to claim it and there is no provision to offset winings with losess.

[carl mckenzie]

It would seem the regional offices may have some control over what is taken out. But my understanding of the IRS provision is 600-1 pay out is subject to the w2g form. But the real rub is the 30% they take from the larger hits. With about a third of your hit being held until you file in April you can litterly be ground out of capital. I was part of a small syndicate playing only P6's a number of years ago and while our bank was nearly 250k we found ourselves many times during the year being ground down with the take by the feds. We would play only carryovers in SoCal and NYRA tracks and there were times when we would hit for 75-100k and have 30k held by the feds. Then shoot for two or three large pics and miss then hit a good one and have another 30k taken out. By the end of the year we would collectively have a very large sum being held by the feds and just try and get the refund or explaining to the auditor that yeah we won a great deal of money but here look at the loses. The hassel and the need for huge resources ended the p6 project as we wanted to play it. "carl"

[hurrikane]

Geez Carl, with a story like that I wonder why they didn't have you in front of the Senate commitee on the IRS. :D

[carl mckenzie]

Well the story is true and all the taxes and audits are complete.

But the problem is still there for the p6 bettor.
I believe Steve Crist wrote extensively about the same problem he was having with his p6 play.

[Glen]

Carl,

I love the P6 story. Below is an interesting article on the subject.
http://washingtonpost.com/wp-dyn/sports/columns/beyerandrew/A62621-2001May22.html

Played the P6 quite a bit last summer and found for a small player like myself, I was best off playing when there wasn't a carry over. When there was a carryover, all the sharks got in there and reduced the payouts. Even when there were multiple longshots.

Got hooked cause the the 1st 3 times I played it, I hit it once and hit 5/6 the other 2 times. Was all down hill from there... Closest I came to cashing bit time was the final horse I threw out to cut my ticket from $400 to $200. Needless to say the final horse I threw out won for $40 something. If I had left him in I woulda swept the pool for $200K. So much for all that???!! Back to the salt mines for now...

[carl mckenzie]

Hi Glenn,

It's interesting that you found the non-carryover days as being more lucrative for the smaller player then the carryover days.

I believe my research showed NYRA and SoCal p6/p5 payouts would always on average pay more. But non-the less the p6 is a brutal one to hit on short money.

The Crist formula of never anymore the 5-600 on non carry over days and never less then somewhere in the thousands for carryover days is so very true.

I can remember one time when the cash heavy partner insisted on investing $35,000 in a SoCal p6 chasing at least $900,000 pool. Not believing a last out maiden lone front speed winner could repeat he also insisted on leaving that one out of the first leg. I THINK YOU CAN FINISH THE STORY FROM THERE. We didn't object since he was fronting all the money for that p6 try.

Thanks for the link to AB's articles.

I don't know if AB was aware of the fact that a very long time ago during late 50's or early 60's Rockingham Park was offering a twin pick3 on 6 consecutive races. So to be alive in the second half of that split p6 you had to have a good supply of first half winners.

The SHARKS(PROBABLY THE SAME ONES AS TODAY) were also cruising around the back of the grandstand looking for first half winners who were willing to sell out for a price. In those days my father and I would gladly sell out the first half if it figured at parlay or better. Matter of fact we would approach the day with that thought in mind. Put together a winning first half of the twin p3 and sell out to the highest bidder. As a teenager a couple hundred dollars was a major score and I was thrilled to file that day as a winner.

carl