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  #1  
Old 12-16-2009, 09:39 AM
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Sierra Sierra is offline
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Default Is free slot play taxable?


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We're playing in the winterfest next week, and like a lot of casinos, HET now pays off in slot play.

so what if you win the $5000 free slot play? does that trigger a W2g? how could it when you haven't won real money yet? If you play it in small increments, taking out under $1200, wouldn't that avoid it?

Anyway, just dreaming, but like to be prepared.....
  #2  
Old 12-16-2009, 09:59 AM
Reston Reston is offline
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I'm not a tax attorney, but here goes....

Free play does not represent any winnings until you convert it into credits that you cash out. The amount of cash that you "win" would be taxable, as is all gambling income. However, I don't think even if you played the free play all at once and cashed out $1200 or more it would trigger a W2-G unless there was a single hit greater than that amount.

I could be wrong, though.
  #3  
Old 12-16-2009, 09:59 AM
PPtraderal PPtraderal is offline
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Default free slot play

In my opinion it would fall under the "Windfall Wagering Prizes and Awards" section of the tax code.
I.E. If you won a new car at a church raffle they would issue you a 1099 for the fair market value
of the prize. Of course if your diligent, you can offset losses from any type of gaming with losing tickets.
That's why it's important to join slot clubs as your gaming history is well documented. Just my opinion, but I believe I'm interpreting the section correctly. Please refer to IRS Publication 525 for a more detailed
explanation. Publication 529 demonstrates how to write off losses if you itemize deductions. Hope this helps. I would hope that Harrah's would somehow not issue a W-2 G, but I somehow doubt that they would not.
  #4  
Old 12-16-2009, 03:39 PM
Reston Reston is offline
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Quote:
Originally Posted by PPtraderal View Post
I.E. If you won a new car at a church raffle they would issue you a 1099 for the fair market value of the prize..
But how would you determine the fair market value of the free play? It certainly isn't 100%. And what happens if you hit a jackpot while playing with the free play? Would you get taxed twice?
  #5  
Old 12-16-2009, 04:37 PM
PPtraderal PPtraderal is offline
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Default Free Play

Actually it would be two distinct transactions. Let's say you won $1,500.00. OK, you put the money in your pocket. Now you take a $ 20.00 dollar bill and hit another jackpot. The Casino issues a W-2 G for the new transaction. I know the tax code is crazy but any source of revenue, whether cash, goods, or services, can be considered taxable. The issue for determination remains the valuation of a $ 5,000.00 free play offer.
As such this would be a transaction unto itself, and I'm guessing that the IRS would place a value of $ 5,000.00 on that event.
  #6  
Old 12-16-2009, 05:29 PM
Reston Reston is offline
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The difference in your example is that you are putting your own money back into the machine. In the case of free play, however, it isn't your money until you cycle it through one of the casino's machines. (The other issue in your example is whether the play on the slots counts as one session or not; lots of murkiness there. Of course, if you trigger multiple W2-Gs, you may be screwed regardless because of the rules for offsetting losses.)

I'm going to stick with the free play not being taxable, but any winnings you remove from the machine are taxable. The IRS can sue me if I'm wrong, lol.

P.S. Actually, if I'm wrong, there will be a W2-G issued for the free play and my argument is moot. But that means I'm obligated to report as income any and all free play deals I get from a casino. Ain't gonna happen!
  #7  
Old 12-17-2009, 04:34 AM
lou709 lou709 is offline
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Free play is not taxable. I know that for a fact.

Louise
  #8  
Old 12-17-2009, 08:05 AM
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delo delo is offline
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I've never gotten enough free play to have to worry about it..but I did see a guy use an offer coupon at Harrahs to get a $2500 Macys card..and they did not issue him a W-2G with it..he just walked up and got it, said 'thanks' and walked away.
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  #9  
Old 12-17-2009, 08:31 AM
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Sierra Sierra is offline
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Good to know.

I thought the casinos were going cheap on us with slot play as the win, but at least it's not taxable.
  #10  
Old 12-17-2009, 10:30 AM
jgates8 jgates8 is offline
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Yikes..............I had the $75 Macy's offer.
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