Accountant Forums


Reply
Thread Tools

Winning a church raffle

 
 
Manos
Guest
Posts: n/a
Thanked:
 
      09-28-2004, 08:21 PM
If someone wins a church raffle of which each ticket to
enter the raffle costs $100.00 , which part does the winner
pay taxes on, the price of the ticket or the winnings?. If
it sounds like stupid question forgive me but I have been
hearing some wacky things from different people.

<< ------------------------------------------------->>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org >>
<< ------------------------------------------------->>
 
Reply With Quote
 
 
 
 
Stuart Bronstein
Guest
Posts: n/a
Thanked:
 
      10-02-2004, 08:35 AM
Manos wrote:

> If someone wins a church raffle of which each ticket to
> enter the raffle costs $100.00 , which part does the winner
> pay taxes on, the price of the ticket or the winnings?. If
> it sounds like stupid question forgive me but I have been
> hearing some wacky things from different people.


In general you'd pay tax on the winnings less the cost of
the ticket.

Stu

<< ------------------------------------------------->>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org >>
<< ------------------------------------------------->>
 
Reply With Quote
 
 
 
 
John H. Fisher
Guest
Posts: n/a
Thanked:
 
      10-02-2004, 08:35 AM
> If someone wins a church raffle of which each ticket to
> enter the raffle costs $100.00 , which part does the winner
> pay taxes on, the price of the ticket or the winnings?. If
> it sounds like stupid question forgive me but I have been
> hearing some wacky things from different people.


Raffle tickets are not deductible as contributions. A
purchase is a gambling wager. If you win you may deduct all
of your gambling losses (costs of tickets, etc) from your
gambling winnings but, in no case are you permitted to
deduct more than you've won.

The winnings are reported on line 21 of your tax return.
Only if you are able to itemize on Schedule A (Form 1040)
"Itemized Deductions" will you be able to benefit from using
your gambling losses as deductions.

"Jack" - John H. Fisher - (E-Mail Removed)
Philadelphia, Pa - Atlantic City, NJ - West Wildwood, NJ
My Newsgroups & Boards at: http://members.aol.com/TaxService/index.html

Where Ignorance is bliss, 'tis folly to be wise!=

<< ------------------------------------------------->>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org >>
<< ------------------------------------------------->>
 
Reply With Quote
 
Arthur L. Rubin
Guest
Posts: n/a
Thanked:
 
      10-02-2004, 09:32 AM
Manos wrote:

> If someone wins a church raffle of which each ticket to
> enter the raffle costs $100.00 , which part does the winner
> pay taxes on, the price of the ticket or the winnings?. If
> it sounds like stupid question forgive me but I have been
> hearing some wacky things from different people.


There's a minor dispute going on in misc.taxes about this.
The concensus among those who have some idea what taxes are
(noting the existance of Dale) is either:

1. The winnings less $100 are gambling income, reported on
Form 1040 line 21(?), miscellaneous income. Any additional
losing tickets are gambling losses, reported to the extent
of gambling winnings in Form 1040 Schedule A line 27(?),
miscellaneous deductions not subject to the 2% limit.

2. The winnings are gambling winnings, reported as in
possibility 1. All tickets are gambling losses, reported as
in possibility 1.

I side with 1. The other Art in this group sides with 2. If
the church gives you a 1099, then you pretty much have to
report that amount as gambling winnings.

I think even Art would agree that, if the true fair market
value of the prize is less than $100, the difference is a
gambling loss, even if the church DOES give you a 1099.

<< ------------------------------------------------->>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org >>
<< ------------------------------------------------->>
 
Reply With Quote
 
MAT1040X
Guest
Posts: n/a
Thanked:
 
      10-02-2004, 09:52 AM
> If someone wins a church raffle of which each ticket to
> enter the raffle costs $100.00 , which part does the winner
> pay taxes on, the price of the ticket or the winnings?. If
> it sounds like stupid question forgive me but I have been
> hearing some wacky things from different people.


The value of the winnings is taxable. The cost of the
raffle ticket can be claimed as gambling losses on Schedule
A in an amount not greater than the winnings.

Mary Ann Thomas, EA in AZ

<< ------------------------------------------------->>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org >>
<< ------------------------------------------------->>
 
Reply With Quote
 
Gene E. Utterback, EA
Guest
Posts: n/a
Thanked:
 
      10-02-2004, 10:49 AM
"Manos" <(E-Mail Removed)> wrote:

> If someone wins a church raffle of which each ticket to
> enter the raffle costs $100.00 , which part does the winner
> pay taxes on, the price of the ticket or the winnings?. If
> it sounds like stupid question forgive me but I have been
> hearing some wacky things from different people.


Raffles = Gambling - it matters not that the event was
sponsored by a church, it is gambling just the same.

Gambling losses are deductible to the extent of gambling
winnings AND you get to aggregate gambling losses from all
gambling activities to offset gambling income from one
activity. For example, if you like Blackjack and the Slots
and you win $50,000 playing Blackjack but lose $50,000
playing slots you have both $50,000 of gambling income AND
$50,000 of gambling losses.

In your example, the winner will have gambling income for
the Fair Market Value of the prize and the gambling losses
will include, but are not limited to, the cost of the raffle
ticket. You should total up all of the gambling losses -
all the losing lottery tickets, all the fees and costs of
playing church BINGO.

Gene E. Utterback, EA

<< ------------------------------------------------->>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org >>
<< ------------------------------------------------->>
 
Reply With Quote
 
A.G. Kalman
Guest
Posts: n/a
Thanked:
 
      10-08-2004, 03:23 PM
Manos wrote:

> If someone wins a church raffle of which each ticket to
> enter the raffle costs $100.00 , which part does the winner
> pay taxes on, the price of the ticket or the winnings?. If
> it sounds like stupid question forgive me but I have been
> hearing some wacky things from different people.


I've the read the replies to this post and have a problem
with any response that allows the cost of the winning ticket
to be deducted as a gambling loss. In addition, I have a
problem with any response that says you can deduct the cost
of the ticket from the raffle prize and only declare the net
amount as income.

First: I don't see how one can deduct the cost of the
winning ticket as the taxpayer did not sustain a gambling
loss.

Second: I find nothing in the law that says you can net the
cost of the raffle ticket. A raffle is not like a bet at a
sports book or race track. In those environs, the payoff
includes your winnings and the return of your wager.
Therefore, an even money bet on a football game for $100,
would return the bettor $100 of taxable income and a return
of the $100 bet.

I must conclude that the cost of the winning raffle ticket
is a nondeductible personal expenditure. Naturally, the
cost of any losing raffle tickets may be included with other
gambling losses to offset winnings if the person itemizes.

--
Alan
http://taxtopics.net

<< ------------------------------------------------->>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org >>
<< ------------------------------------------------->>
 
Reply With Quote
 
Arthur L. Rubin
Guest
Posts: n/a
Thanked:
 
      10-11-2004, 03:04 AM
A.G. Kalman wrote:

> Second: I find nothing in the law that says you can net the
> cost of the raffle ticket. A raffle is not like a bet at a
> sports book or race track.


How is a raffle signifcantly different than poker? Or are
claiming that the stakes in a poker game are personal
expenses?

<< ------------------------------------------------->>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org >>
<< ------------------------------------------------->>
 
Reply With Quote
 
A.G. Kalman
Guest
Posts: n/a
Thanked:
 
      10-14-2004, 08:44 AM
Arthur L. Rubin wrote:
> A.G. Kalman wrote:


>> Second: I find nothing in the law that says you can net the
>> cost of the raffle ticket. A raffle is not like a bet at a
>> sports book or race track.


> How is a raffle signifcantly different than poker? Or are
> claiming that the stakes in a poker game are personal
> expenses?


In poker, the money you put into the pot is returned to you
just like a bet on a horse. When you win a car in a raffle,
no one has returned to you your cost of the raffle ticket.

--
Alan
http://taxtopics.net

<< ------------------------------------------------->>
<< The Charter and the Guidelines for submitting >>
<< messages to this newsgroup are at www.asktax.org >>
<< ------------------------------------------------->>
 
Reply With Quote
 
 
 
Reply

Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are On
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
501 c 3 Raffle winner Lisa Businesses / Corporations 0 12-16-2011 06:01 PM
Raffle winnings Dick Adams Tax 49 06-09-2008 01:03 AM
That "squalid raffle" (aka Premium bonds) Times Sat 29 April 2006 Allan Gould UK Finance 53 05-04-2006 10:23 PM
Charity raffle tix-deduction? JJ US Taxes 1 07-21-2005 08:53 PM
Winning Isn't Everything, But Losing COULD BE! Max Kurtovic UK Accountancy 0 01-17-2005 09:55 PM


All times are GMT. The time now is 07:14 AM.
Posts in this forum do not constitute the advice of AccountantForums.com or its members. Financial advice should always be taken from qualified advisors before committing to a financial decision.