MEDIA ALERT: Don’t Get Caught Off Guard by March Madness Tax Implications

Wolters Kluwer Tax & Accounting Reminds You that Winning Your Office
Pool Bracket Could Be a Taxable Event

–(BUSINESS WIRE)–Wolters Kluwer Tax & Accounting:

What: It’s March Madness time and office pool participants are
studying the National Collegiate Athletic Association (NCAA) brackets,
and daily fantasy sports players are putting together their baseball
teams. Wolters Kluwer Tax & Accounting points out that, according to the
Internal Revenue Service (IRS), betting activities could be considered
gambling, business or a hobby – all of which is considered taxable
income. The handling of expenses and the reporting of that income can be
different and is another reason to reach out to a Tax professional.


Why: Placing a bet in the NCAA bracket office pool is considered
to be gambling, even though participants may claim some skill in
selecting their bracket winners. Under the Tax Code, any income earned
from gambling is taxable whether the gambling is legal or illegal. Under
a US Supreme Court decision in 2018, all states are now permitted to
offer sports gambling, and many have enacted or are starting to enact
enabling legislation. This will make it easier to do legal sports
betting and may also help the IRS track sports betting activity.

Under the 2006 Unlawful Internet Gambling Enforcement Act, fantasy
sports were determined to be a game of skill rather than gambling. As a
game of skill, it is either a hobby or a business depending on the facts
involved. Income from a hobby or business is also taxable. The IRS has
not said officially that it agrees with that position and some states
have taken the opposite position, viewing fantasy sports as gambling. If
an individual can establish profits from the activity for three of the
last five years or that the activity is engaged in as the primary source
of income for the taxpayer on a full-time basis, the individual can be
considered to be engaged in a trade or business.

Who: Tax expert Mark Luscombe, JD, LL.M, CPA, Principal Federal
Tax Analyst at Wolters Kluwer Tax & Accounting, can help sort through
the various rules, requirements and reporting forms for gamblers,
hobbyist or businesses, as well as the different ways in which expenses
and losses are handled.

Contact: To arrange interviews with Mark Luscombe or other
federal and state tax experts from Wolters Kluwer Tax & Accounting on
this or any other tax-related topics, please contact:

MARISA WESTCOTT
212-771-0853

Marisa.westcott@wolterskluwer.com

Contacts

MARISA WESTCOTT
212-771-0853
Marisa.westcott@wolterskluwer.com

Thank you for donating to DutchNews.nl.

We could not provide the Dutch News service, and keep it free of charge, without the generous support of our readers. Your donations allow us to report on issues you tell us matter, and provide you with a summary of the most important Dutch news each day.

Make a donation