If you’re lucky enough to be a winner at gambling or the
lottery, congratulations! But be aware there are tax consequences. You must
report 100% of your winnings as taxable income. If you itemize deductions, you
can deduct losses but only up to the amount of winnings. You report lottery
winnings as income in the year you actually receive them. In the case of
noncash prizes (such as a car), this would be the year the prize is received.
With cash, if you take the winnings in annual installments, you only report
each year’s installment as income for that year. These are just the basic
rules. Contact us with questions. We can help you minimize taxes and stay in
compliance with all requirements.