Gambling winnings - what now??

[birdprincess]

The 341 creditor meeting was over a month ago. We are an asset case with undeveloped property to be sold at auction.

Now I just won a jackpot at the casino and had to get the federal taxes form...how will this affect the bankruptcy? Is this earned income and need not be reported to Trustee?

Thanks!

[AngelinaCatHub]

The 341 creditor meeting was over a month ago. We are an asset case with undeveloped property to be sold at auction.

Now I just won a jackpot at the casino and had to get the federal taxes form...how will this affect the bankruptcy? Is this earned income and need not be reported to Trustee?

Thanks!

Nope. Everything including winning a lottery needs to be reported. C7 if total liquidation with the assets if any evenly distributed to the Creditors. The Trustee works for Creditors not for you.

The biggest mistake that could take your bk down is not to report this, unless it could bail you out of C7 and leave you solvent. 'Hub

EDIT: None of my business, but you are in a C7. Why are you gambling? What got you into C7, gambling? If so, you will be back. My opinion.

[sh9730]

'Hub,

I thought I read elsewhere here that ANY income that occurs after the date of filing is fair game to keep? Now, I do understand that if you KNOW there is significant income in the future (either from a known job bump or inheritance or other) then you must disclose it at time of filing/341, but I thought everything was a snapshot as of the day of filing. Im sure I read this exact thing here (using the hypothetical of winning the lottery).?

[AngelinaCat]

I also think I have read somewhere here that an unexpected windfall such as this, is yours to keep. An inheritance that you think you will be getting within 180 days of the 341, will become part of the BK estate, but not this.

[ValleYum]

TITLE 11 > CHAPTER 5 > SUBCHAPTER III > § 541

§ 541. Property of the estate

(5) Any interest in property that would have been property of the estate if such interest had been an interest of the debtor on the date of the filing of the petition, and that the debtor acquires or becomes entitled to acquire within 180 days after such date:
(A) by bequest, devise, or inheritance;
(B) as a result of a property settlement agreement with the debtor's spouse, or of an interlocutory or final divorce decree; or
(C) as a beneficiary of a life insurance policy or of a death benefit plan.

http://www.law.cornell.edu/uscode/usc_sec_11_00000541----000-.html

That being 'read', I'd still let my attorney know in the interest of full disclosure.

Congrats to the OP!

[despritfreya]

The post petition casino winnings are not property of your Chapter 7 estate and do not have to be reported.

Des.

[birdprincess]

Thank you all for your insight. I used some of my SSDI backpay to celebrate at the casino. Not the reason for the bankruptcy at all. Sounds like it is only taxed by the IRS next year and not a part of our Bankruptcy estate. Thanks again!

Birdprincess

[daylate]

Just make sure you can document any gambling losses so you can offset those winnings on your tax return. Congrats and good luck.

[tobee43]

Just make sure you can document any gambling losses so you can offset those winnings on your tax return. Congrats and good luck.

great advise daylate!! i know my husband's aunt is suppose to always have been the big gambler in the family and always says how much she has won..we never heard about how much was lost to get those winnings...which are as you point out, can be claimed to offset the gains on the winnings.