Reminder: Your Super Bowl Gambling Winnings Are Taxable

Posted on by Caleb Newquist

So it's the Monday after the Super Bowl and most of you are suffering from some kind of hangover. Whether it was caused by food, booze or you're simply wallowing in a lack of a Peyton Manning comeback, this day should really be a national holiday (even non-football fans can agree on that notion). Melancholy, indigestion and cocktail flues aside, the other certainty that comes with the SB is gambling. And we're not talking friendly-poker-game gambling, we're talking recklessly wagering on every single aspect of the biggest spectacle in sports gambling. Two of the most creative wagers we've seen so far was the betting on rating for the Focus on the Family (featuring Tim Tebow and Mamma Tebow!) ad and the betting the spread between Kim Kardashian's measurements and Reggie Bush's rushing and receiving production. Both of which are completely ridiculous, yet sheer genius. Regardless of where you put your money yesterday (we took the overs on Archie Manning appearances and lost), there are plenty of big winners from yesterday's game. And now that we have a government who is feverishly trying to close a deficit gap, the question remains: will the IRS more aggressively pursue taxpayers for their unreported gambling winnings? If you're a degenerate loser than this obviously doesn't apply to you but if you're lucky enough to find some extra scratch in your pocket, you're legally obligated to report that income next year. Our government is looking for solutions anywhere possible, so it's entirely possible that you could find yourself on the wrong end of an IRS-issued shotgun if you're leaving your winnings off next year's 1040. Look, it's not that crazy and the pols need all the ideas they can get. You've been warned.

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Without Blaming Lehman Directly, FASB Solicits Comments on a Repo Accounting Do-Over

Filed under: more mess to directly blame on the fall of Lehman Brothers and Uncle Ernie’s epic failure

FASB is being awfully kind to those who played a large part in that whole total financial meltdown issue by avoiding actual name-dropping in their latest exposure draft but we don’t need names to know who they are talking about. *coughLehmancough* Here’s the note from FASB yesterday:

The Financial Accounting Standards Board (FASB) issued an Exposure Draft (ED) today to solicit input from stakeholders on its proposal to improve the accounting for repurchase agreements (repos) and other agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity. The FASB requests comments on this ED by January 15, 2011.

“During the global economic crisis, concerns were expressed about a narrow aspect of existing guidance for determining whether a repo should be accounted for as a sale or as a secured borrowing,” notes FASB Acting Chairman Leslie F. Seidman. “The proposals contained in this Exposure Draft seek to address these concerns by simplifying this guidance.”

You hear that? You’ve got until January 15th to draw up your fantastic comment letters (please don’t disappoint us, we haven’t seen a good comment letter since North Carolina State Employees’ Credit Union President James Blaine said of mark-to-market: “Theoretically arrogant; in practice insane; financially negligent and reckless. Other than that, I have no concerns.”) on this new repo accounting proposal.

Once again, FASB wants the input of the worker grunts to find out A) what the plan is and B) how they should go about implementing it.

Seeing as how comment letters are a hallmark of our fantastically cooperative profession maybe FASB is going about this the wrong way. After all, it would be the investors who relied on incorrect information on Lehman’s financial condition based on creative repo accounting (mind you, “creative” and “fraudulent” are not the same thing) who are most impacted by current rules and any changes, not the accountants putting together the financial statements. Surely they would know better than to rely on their own financial information.

If you are unfamiliar with the joys of repo accounting FASB has offered a quick primer:

In a typical repo transaction, an entity transfers financial assets to a counterparty in exchange for cash with an agreement for the counterparty to return the same or equivalent financial assets for a fixed price in the future. Topic 860, Transfers and Servicing, prescribes when an entity may or may not recognize a sale upon the transfer of financial assets subject to repo agreements. That determination is based, in part, on whether the entity has maintained effective control over the transferred financial assets.

The amendments in this proposed Update are intended to simplify the accounting for these transactions by removing from the assessment of effective control the criterion requiring the transferor to have the ability to repurchase or redeem the financial assets, as well as implementation guidance related to that criterion.

Clarification is always nice, I guess, but paint me skeptical, I don’t see additional guidance doing much for closing the giant gaping loophole that Lehman drove a truck through on its way right off the cliff.