Level 3

Gambling winnings

Forum|Forum|4 years ago
October 20, 2021
3 replies
12 views

I have a client who won about 30000 in a raffle. Half was cash the other half was a motorcycle. He's gong to keep the cash and donate the motorcycle to a local charity. He has a large NOL that was generated from a partnership from 10 years ago. Is there any reason the NOL won't reduce the winnings to zero. I've talked to other professionals and it seems there is a split in their opinions. Thanks

This topic has been closed for replies.

IRonMaN

Level 15

If you can't get a consensus from other professionals, it sounds like time to do some research and come to your own conclusion since you will be signing the return. Google is a good friend to have.

nol carryforward rules - Google Search

Slava Ukraini!

sjrcpa

Level 15

The NOL won't reduce the winnings.

It will reduce AGI.

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

sjrcpa

Level 15

Are you sure that's a 10 year old NOL? Why wasn't it used in the last 10 years?

Might it be a passive loss carryover? Or a loss in excess of basis?

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

BobKamman

Level 15

I've had more than one client with an NOL carryover that ended only with their death many years later. Typically, someone with a disaster in high-risk years will retire and need only $20K or $30K a year to reduce their AGI to zero. I keep a "permanent comment" in the files (hard copy and software) to remind me of when it eventually runs out. 25 years for some of them?

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