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  • stlcardinals84

    Leading RG Analyst

    • 290

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    • 2018 DraftKings FBWC Finalist

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    FanThrowDown issuing 1099’s based on gross winnings.

    While most sites use “net winnings” or “net withdrawals” for their 1099 reporting, FanThrowDown has decided to use the brilliant method of “gross winnings” for their reporting.

    That means if you deposited $1,000 there, won $500 worth of contests, and lost $1,500 worth to go broke, they will still be sending you a 1099 form for $500. To me, this is the worst method of reporting DFS results and will cause a major hassle for people who played on FanThrowDown and also other sites.

    If you are going to use the winnings method instead of the withdrawal method, at least have the decency to net it out first for the user. That’s just common sense.

    As a CPA with a vested interest in this, it’s yet another mistake from a site that is quickly falling behind. Good luck reporting this on your tax returns. It’s a huge mistake and frankly is enough for me to stop 100% of my action there.

  • kirklandguy

    I think I triggered this whole thing yesterday after asking live support why my withdrawl was taking a week, the email came out right after they sent me a W-9.

    I have a question back out to the person at FTD that sent me a W-9 to clarify what they mean by “gross winnings”. I am sincerely hoping this is a mistake of terminology.

    If that truly is the case, I’ll be stopping 100% of my action there as well and I hope every serious grinder does too. Complete last straw after several missteps by FTD.

  • stlcardinals84

    Leading RG Analyst

    • 290

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    • 2018 DraftKings FBWC Finalist

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    I’ll be honest – I lost my butt over there last year.

    Put in a few deposits, never took a withdrawal out, and had a low balance at the end of the year.

    Now they’re going to issue me a 1099 based on gross winnings? That is NOT the way to do it. It has to be netted at the site level, whether you are using the net winnings or net withdrawal method. Either is fine, just not this way.

  • chippyboy9

    @stlcardinals84 said…

    FanThrowDown issuing 1099’s based on gross winnings.

    While most sites use “net winnings” or “net withdrawals” for their 1099 reporting, FanThrowDown has decided to use the brilliant method of “gross winnings” for their reporting.

    That means if you deposited $1,000 there, won $500 worth of contests, and lost $1,500 worth to go broke, they will still be sending you a 1099 form for $500. To me, this is the worst method of reporting DFS results and will cause a major hassle for people who played on FanThrowDown and also other sites.

    If you are going to use the winnings method instead of the withdrawal method, at least have the decency to net it out first for the user. That’s just common sense.

    As a CPA with a vested interest in this, it’s yet another mistake from a site that is quickly falling behind. Good luck reporting this on your tax returns. It’s a huge mistake and frankly is enough for me to stop 100% of my action there.

    I know that with brokerage and bank accounts, there is a standard way the IRS requires the company to report the figures. With DFS, is there a standard way? or does the IRS give each company the choice?

    Reason I ask: If they reported everything incorrectly, I wonder if they will be required to issue corrected 1099’s to everyone?

  • stlcardinals84

    Leading RG Analyst

    • 290

      RG Overall Ranking

    • 2018 DraftKings FBWC Finalist

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    @chippyboy9 said…

    I know that with brokerage and bank accounts, there is a standard way the IRS requires the company to report the figures. With DFS, is there a standard way? or does the IRS give each company the choice?

    Reason I ask: If they reported everything incorrectly, I wonder if they will be required to issue corrected 1099’s to everyone?

    There is no standard way for DFS, but virtually every site uses one of the two methods I described — net winnings or net withdrawals. No site uses gross winnings. It would require each user to figure out the dollar value of contests they lost ON THEIR OWN to net against those winnings.

    Imagine how long that would take for a high volume player.

    I can’t reiterate enough how stupid this is.

  • kirklandguy

    Not to mention any high volume player is going to rack up a gigantic 1099 on “gross winnings”, and netting that out on a tax form is likely to increase audit chances I would suspect. Imagine a 6-figure 1099 where you have to net out most of that yourself.

  • stlcardinals84

    Leading RG Analyst

    • 290

      RG Overall Ranking

    • 2018 DraftKings FBWC Finalist

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    @kirklandguy said…

    Not to mention any high volume player is going to rack up a gigantic 1099 on “gross winnings”, and netting that out on a tax form is likely to increase audit chances I would suspect. Imagine a 6-figure 1099 where you have to net out most of that yourself.

    1000% correct.

    If I played high volume over there, I would be completely and utterly furious over this. Instead, I’m only 50% furious.

    Really, they need to rethink this.

  • sethayates

    @stlcardinals84 said…

    FanThrowDown issuing 1099’s based on gross winnings.

    While most sites use “net winnings” or “net withdrawals” for their 1099 reporting, FanThrowDown has decided to use the brilliant method of “gross winnings” for their reporting.

    That means if you deposited $1,000 there, won $500 worth of contests, and lost $1,500 worth to go broke, they will still be sending you a 1099 form for $500. To me, this is the worst method of reporting DFS results and will cause a major hassle for people who played on FanThrowDown and also other sites.

    If you are going to use the winnings method instead of the withdrawal method, at least have the decency to net it out first for the user. That’s just common sense.

    As a CPA with a vested interest in this, it’s yet another mistake from a site that is quickly falling behind. Good luck reporting this on your tax returns. It’s a huge mistake and frankly is enough for me to stop 100% of my action there.

    Looking at this from the site’s perspective it seems completely wrong to me. I have an Accounting degree but I’m not an accountant. From what I remember though 1099s are a way to document your payments. In most industries the IRS requires a 1099 for any “supplier” over a ceratin amount.

    From the site’s perspective deposits equal revenue and prizes paid equal cost of goods/services. It would appear they are inflating thier cost of goods sold which should throw their entire books off.

  • headChopper

    RG Contributor (OG Status)

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    This is the old Snapdraft way of doing it. Pain in the a$$. This is good to know for 2014. Red Flag city for tax returns

  • stlcardinals84

    Leading RG Analyst

    • 290

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    • 2018 DraftKings FBWC Finalist

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    Seriously, it’s going to completely eliminate any and all high volume players from navigating to their site.

  • kirklandguy

    I just received a reply from the person at FTD I was communicating with. They said to expect a followup email with additional details on their tax policy. That’s as much as I’ll quote out of respect for them.

    That said, I’m going to go absolutely ballistic if I get a large 1099 for the 2013 tax year considering my withdrawls from FTD were sub-5k during the 2013 calendar year and I certainly didn’t net much there.
    I will refrain from too much further comment until the followup email is sent.

  • jecarl2

    After working in casinos for over 10 years, these sites really need to adopt win/loss statements like the casinos have. Casinos typically do not send them to all of their players but if asked they do provide them. I live in an area with 10 casinos and you could have multiple W2Gs for jackpots over $1,199.00 but can offset that with win/loss statements for the other casinos if you do have an overall loss.

    STL, you are more knowledgeable on the situation what are your thoughts? If RG can track a players activity, surely there is a way to track a persons play across all of the sites.

    As for FTD, this is a major deal breaker. I don’t play on that site and probably never will now.

  • FastEddieFear

    I couldn’t agree with STLCards more. My taxes are already a nightmare, having to deal with income from three other DFS sites aside from regular and investment income. Now I’ve got to do a nightmare FTD 1099 due to this definition of “winnings.” Please reconsider and choose any of the more reasonable definitions of “winnings” that other sites use:

    Withdrawals – Deposits

    or

    Withdrawals + Balance – Deposits

    or

    Withdrawls + Balance – deposits – rake/fees

    Or anything but just gross winnings. I think I only played an average of maybe $250 a day there, and only for the last couple months. But presuming I played for an entire year at that rate, you are going to tell the IRS I had an income of nearly 100 grand? And again it’s worst for those of us who play multiple sites.
    Let’s assume I break even, I’m going to report to the IRS that I had no actual income at all on that 100k, while paying a decent % on each of the other DFS 1099s which are much smaller?

  • lovesbases

    dealing with this tax stuff makes me want to slit my wrists. Why can’t the sites and CPAs and govt agree on all of this?

  • FastEddieFear

    Also, I couldn’t help but notice while making my withdrawal just now the following text on the withdrawal page:

    “For withdrawals of $250 or more we may request that you provide your social security number before the withdrawal is processed – this helps in the event that your annual net winnings may exceed $600 and we are required to file a 1099-MISC tax form.”

  • tipandpick

    • 2016 FanDuel WFFC Finalist

    • 2014 FAFC Champion

    @sethayates said…

    Looking at this from the site’s perspective it seems completely wrong to me. I have an Accounting degree but I’m not an accountant. From what I remember though 1099s are a way to document your payments. In most industries the IRS requires a 1099 for any “supplier” over a ceratin amount.

    From the site’s perspective deposits equal revenue and prizes paid equal cost of goods/services. It would appear they are inflating thier cost of goods sold which should throw their entire books off.

    ^ This.

    One could speculate on reasons why this might play to the site’s financial advantage, as well…but that’s admittedly conjecture.

  • Schnee1985

    And read the terms and conditions over fanthrowdown. It states that they use net winnings, but I guess they just decided to change their policy at a moment’s notice. Guess those terms and conditions don’t mean much there.

  • britdevine

    • 2014 StarStreet MLB Playboy Mansion Finalist

    Hey guys,

    Just a heads up we will be sending out a follow up e-mail, as well as responding here shortly with a thorough explanation.

  • emac

    • Ranked #88

      RG Tiered Ranking

    @jecarl2 said…

    After working in casinos for over 10 years, these sites really need to adopt win/loss statements like the casinos have. Casinos typically do not send them to all of their players but if asked they do provide them. I live in an area with 10 casinos and you could have multiple W2Gs for jackpots over $1,199.00 but can offset that with win/loss statements for the other casinos if you do have an overall loss.

    STL, you are more knowledgeable on the situation what are your thoughts? If RG can track a players activity, surely there is a way to track a persons play across all of the sites.

    As for FTD, this is a major deal breaker. I don’t play on that site and probably never will now.

    Just a reminder, RG only gets information for wins which is only a part of the pie. With just this slice it is impossible to for RG to know what a gamers net winnings are so they are not able to track the full picture.

  • kirklandguy

    Brit – I would strongly mention to your higher-ups that if this is going to be the policy, that a full scrub of all content on the site should be done.

    From the FAQ page at https://fanthrowdown.com/faq

    “Do I pay taxes on my FTD winnings?
    Yes. FTD is required to issue a 1099 tax form to all players who have gained a profit of more than $600 for the calendar year. Please note that the $600 threshold is not based on withdrawals, but on net profit. ((withdrawals-deposits)+account balance).”

  • stlcardinals84

    Leading RG Analyst

    • 290

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    • 2018 DraftKings FBWC Finalist

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    @kirklandguy said…

    Brit – I would strongly mention to your higher-ups that if this is going to be the policy, that a full scrub of all content on the site should be done.

    I would also strongly suggest that if this is going to be the policy, your site is screwed.

  • kirklandguy

    That too…

  • stlcardinals84

    Leading RG Analyst

    • 290

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    • 2018 DraftKings FBWC Finalist

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    Imagine if FanDuel sent Condia a 1099 based on gross winnings.

  • emac

    • Ranked #88

      RG Tiered Ranking

    @stlcardinals84 said…

    I’ll be honest – I lost my butt over there last year.

    Put in a few deposits, never took a withdrawal out, and had a low balance at the end of the year.

    Now they’re going to issue me a 1099 based on gross winnings? That is NOT the way to do it. It has to be netted at the site level, whether you are using the net winnings or net withdrawal method. Either is fine, just not this way.

    I am in a similar boat Cards…won big in MLB, frittered it away chasing tickets to the big football contest…and having the added bonus of having had decent sized balances rolled over from BuzzDraft and DailyJoust.

    In the event that “secret option C” is the chosen method and, in my opinion, it is the worst and most inaccurate methodology from a gamers perspective, then I suspect the player pool their to quickly dry up.

  • ehafner

    • 2015 RotoGrinders TPOY Champion

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    Well I got my popcorn out for FTD’s response to this….hopefully it’s not too late to reverse themselves. Taxing players on gross winnings would be a big mistake.

  • Mike5754

    2013 PFBC Finalist

    @ehafner said…

    Well I got my popcorn out for FTD’s response to this….hopefully it’s not too late to reverse themselves. Taxing players on gross winnings would be a big mistake.

    +1

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