Level 1

Question

A client claimed lottery winnings for another person in her name and she gave the money to the person who the ticket belonged to. How do I report that in Lacerte?

Forum|Forum|5 years ago
November 9, 2020
5 replies
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Lacerte Tax

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IRonMaN

Level 15

Let's start with - why did they do that?

Slava Ukraini!

George4Tacks

Level 15

1099G reported the winnings? Screen 13.2 There is an input for state lottery winnings to make it not state taxable.

Answers are easy. Questions are hard!

Just-Lisa-Now-

Intuit Community Champion

Lottery income to the dummy that claimed it and gave a gift to the other person (no deduction)....not a sound financial move.

Did the other person have debts that would have seized the money so they didnt claim in their own name?

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

George4Tacks

Level 15

Ours is not question why.

Ours is but to properly report it.

Answers are easy. Questions are hard!

IRonMaN

Level 15

"Ours is not question why.

Ours is but to properly report it."

But I kinda like to know if someone is trying to commit some kind of fraud so I kinda like to question why. I don't really like preparing tax returns for folks that I can't trust.

Slava Ukraini!

BobKamman

Level 15

If A helps B help C commit tax fraud, which is more guilty? I wouldn't want to be A The Accomplice, if I were in the tax return preparation business and knew what "Preparer Project" means.

Substance over form. The income goes on C's return. If it is not B's income, why help them cheat? IRS does have a Form 5754, which should have been given to the lottery when the prize was collected. But that's only for people who aren't trying to break the law.

But I suppose every town needs a red-light district for tax practitioners who are easy with their favors.

T

taxes96786

Level 8

If there is criminal intent they are both equally guilty by law. What proof, in writing, is there to substantiate the claim being made?

T

taxes96786

Level 8

I would not report it on the client's return unless

1. they received a 1099 in their name and SSN

2. they provide a win/loss statement from the casino/s in their name/SSN

gift from friend of this sort is not reportable as a deduction from income.

itonewbie

Level 15

@taxes96786 But neither 1099 nor win/loss statement determines whether an income should be reported.

1099 is only an information return that obliges the payer/withholding agent to report and withhold on an income. Although the payee could reference the info on it for tax reporting, whether or not the payee receives a 1099 is not determinative of whether the payee must report an income or what amount should be report on the recipient's return.

Similarly, the win/loss statement is merely a document that helps determine the extent to which a loss may be deductible.

§61(a) states, in part, that "[e]xcept as otherwise provided in this subtitle, gross income means all income from whatever source derived". As the others explained, the why is important because it determines the character of an income, whether it falls under one of the exceptions defined within the Code, or whether it should be treated as a gift governed by Subtitle B of Title 26.

---------------------------------------------------------------------------------Still an AllStar

sjrcpa

Level 15

Stella hasn't been back. STELLA!

The more I know the more I don’t know.

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