Ask me any tax questions

[Mauricio Wilson]

2 questions:

1. Does the guy who caught the 756 ball really have to pay taxes on it if he keeps it?

2. What kind of proof do you need to claim gambling losses? Do casino ATM receipts count?

[silver book]

I'm on a national merit schlorarship at ASU. Its basically a full ride. I'm from out of state. Should I be paying taxes on this?

[wtf6192002]

[ QUOTE ]
Can you talk about gifts? When are they/aren't they taxable? From the giving end are they deductible?

Assume gifts are in the thousands of $

[/ QUOTE ]

This is an easy one that I can answer really fast before I go to bed.

Gifts are never taxable to the receiver. If Bill Gates gave you 20Billion dollars it would be a tax free event for you.

Any gift of $12K or less is tax free for both. You do not even have to report the gift to the IRS.

For gifts over 12K, the giver has to pay a gift tax.

This limit is an annual limitation. So if your grandma gave you 12K a year for 50 years this would be ok. Also if you are married someone could give you 24K.

I got to go to work BBV4LIFE, I get home at 9pm Ill answer the rest then.

[amazinmets73]

bump

[Barretboy]

Here's the deal folks, The IRS doesn't audit everyone, that would be (more of) a waste of taxpayer money. If you want to enter the 'IRS roulette', know that they only seriously look at about 2% of all returns filed. Within that (apx.) 2%, there are several things that raise red flags on your return (more than 15% of your income is given away as charity, any large gambling losses, etc.). Very seldomly will they won't go after someone who only makes 10G a year; but they could and sometimes do.

[pookvis]

[ QUOTE ]

1. Does the guy who caught the 756 ball really have to pay taxes on it if he keeps it?

[/ QUOTE ]

my undersatanding is yes he does, but a MLB baseball only costs about 9 dollars. If he decides to sell it he has to pay taxes on what it sells for.

[thing85]

[ QUOTE ]
I'm on a national merit schlorarship at ASU. Its basically a full ride. I'm from out of state. Should I be paying taxes on this?

[/ QUOTE ]

Nope!

[wtf6192002]

[ QUOTE ]
2 questions:

1. Does the guy who caught the 756 ball really have to pay taxes on it if he keeps it?

2. What kind of proof do you need to claim gambling losses? Do casino ATM receipts count?

[/ QUOTE ]

Yes, if you walk down the street and find a diamond ring you are supposed to pay taxes on that. The thing is most people do not.

Technically he should pay taxes based on the balls worth the day he received it.

With that being said he probably would not have to right away. Even though this is high profile he could probably get away with not paying taxes until he sells the ball.

For the gambling losses you will want to keep the best records possible. Keep track off all wins and losses. A journal, any receipts and anything you can get to back up your claim.

[wtf6192002]

[ QUOTE ]
[ QUOTE ]

1. Does the guy who caught the 756 ball really have to pay taxes on it if he keeps it?

[/ QUOTE ]

my undersatanding is yes he does, but a MLB baseball only costs about 9 dollars. If he decides to sell it he has to pay taxes on what it sells for.

[/ QUOTE ]

You would have a hard time convincing the IRS that his net worth has only been increased by $9. You can estimate the value of this ball and that is what his tax liability would be based on.

[wtf6192002]

[ QUOTE ]
Here's the deal folks, The IRS doesn't audit everyone, that would be (more of) a waste of taxpayer money. If you want to enter the 'IRS roulette', know that they only seriously look at about 2% of all returns filed. Within that (apx.) 2%, there are several things that raise red flags on your return (more than 15% of your income is given away as charity, any large gambling losses, etc.). Very seldomly will they won't go after someone who only makes 10G a year; but they could and sometimes do.

[/ QUOTE ]

This is true, there is always a difference between theory of tax and the real world.