The Showgate Hotel Casino is an accrual basis taxpayer and maintains its records on a calendar year.

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The Showgate Hotel Casino is an accrual basis taxpayer and maintains its records on a calendar year. It has 3,000 slot machines, one of them a progressive machine whose jackpot increases based on the amount wagered. The casino guarantees that a person who hits the jackpot will receive the lesser of 5% of the amount wagered to date or $250,000. On December 1, 2011, the progressive slot machine reaches the $250,000 maximum payoff. The following January, a hotel guest wins the $250,000 jackpot.

Identify the tax issue(s) posed by the facts presented. Determine the possible tax consequences of each issue that you identify.

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Concepts In Federal Taxation

ISBN: 9780324379556

19th Edition

Authors: Kevin E. Murphy, Mark Higgins, Tonya K. Flesher

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