Q: I owe my mom a lot of money I want to gift my casino jackpot to my mom will I still have to report it to IRS
The jackpot is over $5,000 I know if I keep the money for myself I will have to report it to the IRS and they will get a percentage of it but if I gift it to my family member and it is under $17,000 does it still need to be reported?
A:
Hi there,
If you win a casino jackpot over $5,000, this income must be reported to the IRS, regardless of your decision to keep it or gift it to a family member. When you gift it to someone, such as your mom, and the amount is under the annual gift tax exclusion (which was $17,000 as of your last update), you generally do not need to file a gift tax return for this specific transfer.
However, it's important to remember that the responsibility for reporting the gambling winnings lies with you, as the recipient of the jackpot. The casino will likely issue a Form W-2G for such a large win, and this will be reported to the IRS. Even if you subsequently gift the money, the initial receipt of the winnings is a taxable event for you.
When you give a gift to your mom within the exclusion limit, it does not trigger a taxable event for her. But, you should still keep records of this transaction, as it may be relevant for future tax considerations, especially if you make other substantial gifts in the same tax year.
In summary, while gifting the money to your mom under the exclusion limit may not require additional gift tax filings, the initial winnings are still taxable income to you, and must be reported to the IRS. For specific advice tailored to your situation, it's advisable to consult with a tax professional.
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