Those who have been betting on sports online since FanDuel, DraftKings and others launched in North Carolina last month may want to brace themselves for a higher tax bill next year, even if they lose.
That's because of an oddity in the federal tax code that Tony Messia wrote about in the Charlotte Ledger Business Newsletter.
He currently participates in the BizWorthy segment.
Marshall Terry: I see, of course if you win, it counts as income. But what happens if you lose?
Tony Messiah: Even if you end up with a net loss, you could end up paying taxes because your winnings are basically taxed. And in many cases, losses cannot actually be deducted. Generally, if you have a side job, you are allowed to deduct expenses from your income. You can't do that with gambling. This means that you will be taxed on the upside, but you will not be able to deduct any losses on the downside. And of course, most people lose.
Terry: Now, what about state taxes?
Messiah: Yes, that's interesting. State taxes do not provide any ability to deduct gambling losses. You can deduct gambling losses on your federal taxes if you itemize, but only about 10% of taxpayers do so. However, in North Carolina, there is no provision for deducting gambling losses. So you'll pay taxes on the upswing, but you won't be able to deduct the loss on the downswing.
Terry: So what can bettors do? Is there anything more than bullet points? As you said, this is something a lot of people don't do.
Messiah: Another thing a tax professional can do for me [is] Just leave a really good record. It may also be worth noting that in most cases these sports betting platforms do not tell the IRS how much income and losses they have. They only do it in very specific circumstances. Therefore, many people will probably make mistakes regarding taxes, probably unintentional mistakes. So it's a bit of a bind.
Terry: Okay. Now, let's switch gears. We've been following the struggles of the office market for some time and whether empty towers uptown should be turned into apartments. You report that the developer has another idea, right?
Messiah: Well, when I spoke to Gary Chesson of the real estate firm Trinity Partners last week at the Charlotte Rotary, he asked me what to do with an empty old office building uptown. And what developers often say is that we should consider turning it into affordable housing, or that it could be better equipped. “Sticks of dynamite might be the best and best use,” he said, suggesting that perhaps they should be demolished and replaced with new residential towers, which might be the best solution. But certainly we haven't seen that yet.
Terry: Charlotte has a long history of breaking things. Next we move on to the social district. A few weeks ago, we talked about the new social district opening at Plaza Midwood. But now another store has opened. where?
Messiah: Pineville launched Marshall, a social district downtown, this week. We went outside and talked to the owner of the taproom there. He said he expects the store to draw people from all over the area. [He] He said he believes Pineville is competing with Fort Mill, Matthews and South End in terms of attracting people to attend. Pineville joins a long list of area cities that are adding social districts, including Gastonia, Monroe, Statesville, Kannapolis, Davidson and, of course, the city of Charlotte, which added its first social district at Plaza Midwood earlier this year. Raised.
Terry: Prom season has finally arrived. We checked in to see what's trending this year. What did you find? And do the trends say anything about the economy?
Messiah: We went to meet some companies that work with prom-goers, and found out that some of this year's items include reflective dresses, Marshall. There are dresses that change color when the light hits them from different angles, and small bouquets of flowers instead of traditional corsages. They are becoming more and more popular. Apparently, teenagers believe they are better at their jobs and look better in photos.
What does that say about the economy? I mean, I'm sure there are people who are willing to spend money on prom. On Saturday night, I saw a big stretch limousine. It's true that prom, which many people see as a very memorable experience, seems to cost a lot of money.
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