[Guest]

I was just checking in to the SRS site and was wondering that if you won $30K cash and $25K value in trailer, wouldn't the taxes on that basically wipe out the cash? Don't get me wrong, I'd love to win it. I just thought the tax bracket on winnings is around 50%....

-K

 

[Cory and Dakota]

Most people that would be running would probably be in a mid 30's % tax bracket for ordinary income.

Of course, much of this income could be offset by expenses and greatly reduce the actual taxes paid on the winnings.

CPA regards,
Cory

 

[Guest]

Most people that would be running would probably be in a mid 30's % tax bracket for ordinary income.

Of course, much of this income could be offset by expenses and greatly reduce the actual taxes paid on the winnings.

CPA regards,
Cory

So winnings aren't in a category separate to income?

 

[Shayne Mehringer]

Rodeo riders winnings are considered income, taxable less the expenses of being a rodeo rider.

I would imagine the same would apply here, unless the winner was an AMATEUR or if the owner of the dog requires that any winnings go to him/her and not the pro.

SM

 

[Aaron Homburg]

Rodeo riders winnings are considered income, taxable less the expenses of being a rodeo rider.

I would imagine the same would apply here, unless the winner was an AMATEUR or if the owner of the dog requires that any winnings go to him/her and not the pro.

SM

Shayne you bring up another question.....how do the pro's handle the money in this game???.....do they split with the owner...take it all...owner gets it all??? I suppose it differs from pro to pro.....but an interesting question though...

Aaron

 

[Guest]

Rodeo riders winnings are considered income, taxable less the expenses of being a rodeo rider.

I would imagine the same would apply here, unless the winner was an AMATEUR or if the owner of the dog requires that any winnings go to him/her and not the pro.

SM

oh, I get it now... the winnings are based on performance versus just a fluke "lottery-type" win... got it.

 

[Granddaddy]

Winnings are income. Taxes are calculated based upon your income bracket (net winnings + other net income determine the applicable bracket).

Another question, let's say an amateur wins or places in SRS & accepts the prize money &/or equipment - how does that affect his amateur status for AKC field trial events? I know we have had this discussion, in a general sense about who is an amateur. I know that there are those that board dogs for fees that are competing as amateurs in AKC FTs, those that teach obedience/agility for fees that compete in AKC FTs as an amateur, those that collect stud fees or sell pups, etc. But this question is specifically related to SRS earnings for handling a dog to a placement in an SRS event. How would winning money or equipment affect that person's AKC amateur status?

 

[Cory and Dakota]

Yep, any money coming in during an event like this would be ordinary income for the person that accepts the money, in my opinion. If the owner took the money and then gave half to the pro as payment, it would be taxable to both of them. If he gave it as a gift to the pro, it would only be taxable for the amount over the gift limit. (I think it is $10,000 right now but not sure on that.)

To lower your taxes, try to argue that it is a long term capital gain since you have trained your dog for years to earn this money! Tax rates on LTG's are much lower. Most likey, The IRS would not share this view. LTG however. Your CPA might find a way to do it however.

Cory

 

[K G]

How would winning money or equipment affect that person's AKC amateur status?

ZERO effect. It's not classified as income received for training a dog/improving a dog's skills for field trials or hunting.

kg

 

[Tim Carrion]

How would winning money or equipment affect that person's AKC amateur status?

ZERO effect. It's not classified as income received for training a dog/improving a dog's skills for field trials or hunting.

kg

All questions resurface and maybe one day income will be income, training will be training and hunting skills competition will mean just that.
At present the regs leave the determination of Amat status to the FTC.

Tim

 

[wenglish]

So in alls minds who do you think wil walk out the WINNER????

 

[K G]

All questions resurface and maybe one day income will be income, training will be training and hunting skills competition will mean just that.
At present the regs leave the determination of Amat status to the FTC.

Any committee that wants to follow the AKC definition of Amateur as it's currently written will not count SRS winnings as income derived from the training of a dog for field trials or hunting.

kg

 

[DL]

Yep, any money coming in during an event like this would be ordinary income for the person that accepts the money, in my opinion. If the owner took the money and then gave half to the pro as payment, it would be taxable to both of them. If he gave it as a gift to the pro, it would only be taxable for the amount over the gift limit. (I think it is $10,000 right now but not sure on that.)

To lower your taxes, try to argue that it is a long term capital gain since you have trained your dog for years to earn this money! Tax rates on LTG's are much lower. Most likey, The IRS would not share this view. LTG however. Your CPA might find a way to do it however.

Cory

I believe your post is a little half baked in regards to taxes.

 

[Cory and Dakota]

Please provide your opinion if mine is flawed. I am not a personal tax specialist by any means. My practice is strategic corporate tax avoidance and compliance.

 

[DL]

Please provide your opinion if mine is flawed. I am not a personal tax specialist by any means. My practice is strategic corporate tax avoidance and compliance.

I've never done any professional accounting, and have only been taking some CPE recently, so I've developed a little interest in taxes. I figured you might want an opinion if someone actually thought something was half baked.

Part of what I thought might have been half baked, is the recognition of SRS winnings as capital gains. It seems far fetched to me but I really don't know. I suspect the winner gets something like a 1099 or the equivalent at the end of the year stating what sort of income it is.

The other part that I am a little more sure about is the taxation of gifts. A gift is not taxable to a recipient regardless of the amount. If the amount is over the annual limit, it is legally supposed to reduce the lifetime estate tax exemption amount, and tax is only required to be paid after the exemption amount is used up. If it is paid at all, it is estate tax and not income tax.

There is a good chance I've got things wrong. It takes a lot of effort to figure things out, and remember things from the self study CPE I have been taking. Thanks for posting.

 

[Mike Noel]

So in alls minds who do you think wil walk out the WINNER????

JT and Avery :wink: They win everytime!

 

[Cory and Dakota]

As I put in my prior post, it would be extremely agressive to try the LTG route and does not fit the real intent of a LTG. It was a somewhat sarcastic remark that since you put years of work into the dog, then the gain should be treated as a LTG. The IRS would not share this view since you didn't directly invest money and were expecting the gain later.

A gift to an individual is definitely a taxable situation. If you gave your pro the money as a gift, you have to pay his tax on the money as well for over the limit. Now you are paying tax twice on some of the winnings. (The limit has been increased since I took the CPA exam to $12,000 per year. It used to be $10,000)

Here is the Gift Tax blurb from the IRS website.

"IRS Tax Tip 2007-39

If you gave any one person gifts in 2006 that valued at more than $12,000, you must report the total gifts to the Internal Revenue Service and may have to pay tax on the gifts.

The person who receives your gift does not have to report the gift to the IRS or pay gift or income tax on its value.

Gifts include money and property, including the use of property without expecting to receive something of equal value in return. If you sell something at less than its value or make an interest-free or reduced-interest loan, you may be making a gift."

 

[Paul Yates]

So in alls minds who do you think wil walk out the WINNER????

JT and Avery :wink: They win everytime!

DING DING DING. we have a winner!

 

[BamaK9]

So in alls minds who do you think wil walk out the WINNER????

JT and Avery :wink: They win everytime!

DING DING DING. we have a winner!

does the business you work for(or own) do it so they can lose money? I didn't think so ... I think the proverbial "horse" is beaten into mush by now guys, I think everybody knows now that you're pissed they make some money in their profession :roll: I don't condone the mistake or any possible alleged tomfoolery by any stretch, but good lord folks I sure as hell ain't working for free and don't expect them to either. I would love it if every season an Avery truck pulled up in my yard and loaded up all last years dekes and gave me new ones for free ... that would work wouldn't it? :roll:

 

[MJT1977]

If you think the AKC doesn't do it for money your wrong too. There would be many different rules and reg's if they didn't do it for the money.

Marty