Daily Fantasy Tax Reporting

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Sports betting“At the onset of Daily Fantasy Sports, there was much debate as to what type of “activity” individuals are engaging in. The IRS determined that playing DFS was a game of skill and technical ability. Players had to develop a strategy, research athletes, and build a team that will gain the most points possible in order to win a “set prize.” Compared to gambling activities, where the IRS views those activities as a game of “luck,” winning an undeterminable amount (the professional gamblers in the community would disagree). This distinction caused DraftKings and Fan Duel to mail out Form 1099-Misc to their participants. This opens up DFS income into a grey area of taxation. Is your playing style a hobby or full time job/business? We will discuss further.

Note: You cannot write off gambling losses against your DFS income. They are two different activities with different tax rules. Sorry!

If you have winnings of over $600 from any daily fantasy sports site, such as FanDuel or DraftKings, you will likely receive a Form 1099-MISC with the amount shown on Box 3. It is advised that you to report all earnings on your income tax return and not just earnings reported to you on a 1099-MISC or other tax forms…”

Daily Fantasy Tax Reporting.  Read the rest below.

RotoGrinders: Daily Fantasy Tax Reporting

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About Editor

Rich Nilsen is a 15-time qualifier to the National Horseplayers Championship (NHC), an event he has cashed in four times. He was the first player to finish in the top 10 twice. He was also a winner of a $24,000 package into Kentucky Derby Betting Championship I. A former executive with Brisnet.com, Rich is also a graduate of the University of Louisville Equine Business Program. He is founder of AGameofSkill.com, a site devoted to horse racing education and promotion.

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