TupeloPro
TupeloPro
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January 30th, 2014 at 1:04:15 AM permalink
Four years ago (approx 2010), I hit a Pai Gow Table games progressive at a Las Vegas casino for (approx.) 65k. Upon receipt of the W2-G, I was told that the property was required, by law, to withhold a certain % of the progressive jackpot and that my portion of the payout would be (approx.) 48k. At that time I was under the impression that while obviously taxable, it was my choice as to whether I wanted the money withheld for taxes at the time of payout or whether I could choose to pay the taxes on my own. The property's compliance officer agreed and I received the payout in its entirety and I paid the taxes on my own.

My question is as follows: I have heard conflicting reports as to whether this law has changed and whether properties are now actually, legally required to withhold in the case of a table game progressive being won. Does anyone know if the law has changed? If yes, when it changed and/or can link to the code specifying that money must, by law, be withheld?
I am still under the impression that it is my money and my choice. Does anyone know if I am correct/incorrect?

Thanks in advance for all responses/assistance.
AxiomOfChoice
AxiomOfChoice
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January 30th, 2014 at 9:31:28 AM permalink
I've never had anything withheld, as recently as a few months ago. My understanding is that if you provide ID and a social they do not need to withhold anything.
MathExtremist
MathExtremist
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January 30th, 2014 at 9:56:25 AM permalink
http://www.irs.gov/pub/irs-pdf/iw2g.pdf

There are four categories of wagers listed. Other than bingo/keno/slots, all require withholding for prizes of $5000 or more, sometimes with the caveat of 300x the wager. I don't think a table games progressive qualifies as a slot machine, so it probably falls under "other wagering transactions" for which the withholding rules are:

Quote:

Withholding
You must withhold federal income tax from the winnings if the
winnings minus the wager exceed $5,000 and the winnings are
at least 300 times the wager. Withhold 25% of the proceeds (the
winnings minus the wager). This is regular gambling withholding.

If the winner of reportable gambling winnings does not
provide a TIN, you must backup withhold at the rate of 28% on
any such winnings that are not subject to 25% regular gambling
withholding. That is, backup withholding applies if the winnings
are at least $600 but not more than $5,000 and are at least 300
times the wager. Figure backup withholding on the amount of the
winnings reduced, at the option of the payer, by the amount
wagered.

"In my own case, when it seemed to me after a long illness that death was close at hand, I found no little solace in playing constantly at dice." -- Girolamo Cardano, 1563
TupeloPro
TupeloPro
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January 30th, 2014 at 12:20:45 PM permalink
Quote: AxiomOfChoice

I've never had anything withheld, as recently as a few months ago. My understanding is that if you provide ID and a social they do not need to withhold anything.



Can you confirm that your wager met the following criteria:

1. 300-1 odds
2. $5,000.00+ - original wager
3. Table game progressive

I appreciate you taking the time to respond. Thank you.
TupeloPro
TupeloPro
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January 30th, 2014 at 12:22:07 PM permalink
Quote: MathExtremist

http://www.irs.gov/pub/irs-pdf/iw2g.pdf

There are four categories of wagers listed. Other than bingo/keno/slots, all require withholding for prizes of $5000 or more, sometimes with the caveat of 300x the wager. I don't think a table games progressive qualifies as a slot machine, so it probably falls under "other wagering transactions" for which the withholding rules are:



I appreciate you linking to the W2-G. Are you (or anyone else reading this) familiar enough with the form to know what may have been added in the last several years? Im more curious about the changes in the form from 2010 to present that may make it taxable where it wasnt previously. Is it a qualification on the 'other wagering transactions' or was there no 'other wagering transaction' category?

Thank you again.
AxiomOfChoice
AxiomOfChoice
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January 30th, 2014 at 12:23:53 PM permalink
Quote: TupeloPro

Can you confirm that your wager met the following criteria:

1. 300-1 odds
2. $5,000.00+ - original wager
3. Table game progressive

I appreciate you taking the time to respond. Thank you.



In light of MathExtremist's recent post, I'm pretty sure I'm wrong about this. My wager did not meet those criteria.
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