Taxes on Comps - Myvegas & other
Quote: FinsRuleAre you supposed to pay taxes on comps received? If I am "earning" a free night from Myvegas points, I should technically report that on my taxes?
I'm pretty sure no. I don't think any comps other than maybe, MAYBE straight-up cash need to be reported. Not even sure in that case, or in the free play case either.
Quote: Beethoven9thThere's no sales tax on comps, so I don't see why there would be any income tax.
That's a terrible argument! There's no sales tax on gambling winnings, bank interest, investment dividends, or capital gains either. But ALL of the above are taxable as income by the feds.
After poking around the internet, I really haven't the foggiest on the OP. Lots of conflicting information. In any case, no way in hell I'm reporting the "fair market value" or whatever of my free room stays and meals as income. And that's generally the extent of my comps.
Good point.Quote: AcesAndEightsThere's no sales tax on gambling winnings, bank interest, investment dividends, or capital gains either. But ALL of the above are taxable as income by the feds.
Back to the OP's question, I still don't believe comps need to be reported. Also, and I know that this is just anecdotal evidence, but I've never even heard of people reporting their comps on their returns.
Quote: FinsRuleAre you supposed to pay taxes on comps received? If I am "earning" a free night from Myvegas points, I should technically report that on my taxes?
Vegas tax rules may (probably are different). But in AC when I receive comp rooms the disclaimer says I am responsible for all related taxes. And you have to pay the state sales tax upon check out which is based on the value of the room (which usually comes to 10ish dollars per free night where I usually stay).
In NJ free stuff can still be subjected to sales tax at point of "purchase".
Quote: GandlerIn NJ free stuff can still be subjected to sales tax at point of "purchase".
Didn't know that about NJ. I've never been there and don't plan on visiting any time soon. lol
Quote: FinsRuleAre you supposed to pay taxes on comps received? If I am "earning" a free night from Myvegas points, I should technically report that on my taxes?
Yes. You are technically receiving a prize and prizes are taxable in the US. You calculate the prize based on fair market value, not retail value.
It's covered in Publication 525, Page 32. Another interesting thing:
Quote: IRS Publication 525, Page 33
Stolen property.
If you steal property, you must report its fair market value in your income in the year you steal it unless in the same year, you return it to its rightful owner.
LOL!
Quote: boymimboQuote: IRS Publication 525, Page 33
Stolen property.
If you steal property, you must report its fair market value in your income in the year you steal it unless in the same year, you return it to its rightful owner.
LOL!
That's a good point. Heck, if stolen property can be taxed, then it does make sense (from the IRS' point of view) that comps can also be taxed. Sounds like one of those things that's technically on the books but is different to enforce.
