Quick Facts About Legendz Taxes
- Legendz is an online social sportsbook in the US.
- Legendz doesn’t automatically charge or withhold federal income tax.
- Players are responsible for reporting all taxable rewards to the IRS.
- Additional state taxes may apply depending on your location.
- Only players who are 18 and older are allowed to participate in Legendz.
Overview of How Legendz Operates
Legendz is a social sweepstakes casino and sportsbook. The site operates on a virtual currency model made up of Gold Coins (GC) and Sweeps Coins (SC).
Gold Coins are used for entertainment only at Legendz and can’t be redeemed or transferred to other users. They can be claimed through promotions and optional Gold Coin bundle purchases. Sweeps Coins, on the other hand, can also be used to play games on the site and are usually accumulated to be redeemed for cash prizes or gift cards.
However, Sweeps Coins must meet playthrough requirements before bettors can redeem them. Since Legendz is a social sweepstakes, bettors won’t find a no-deposit bonus, as the site doesn’t require a deposit before bettors are allowed to play games.
Because of this, bettors also won’t find any no-deposit bonus codes available. Here’s a table with additional information about Legendz:
| Data | Details |
|---|---|
| Year established | 2024 |
| Excluded states | Connecticut, Idaho, Kentucky, Michigan, Montana, Nebraska, Nevada, New Jersey, New York, North Dakota, Tennessee, Washington, and West Virginia |
| Sports | Features over 30 sports |
How to Sign up At Legendz
If you’re curious about how to sign up at Legendz, here are the steps we followed:
- Tap the banners on this page to visit the official Legendz website
- Click on the Sign Up or Join Now button on the homepage
- Enter your email, username, and password
- Fill in your state/province, street name, zip code, city, and date of birth
- Enter your phone number and agree to the terms and conditions
- Verify your phone number and proceed to claim your welcome bonus
You can also decide to sign up at Legendz using your Facebook or Google accounts as provided on the screen. After a successful registration, you’ll receive 500 Gold Coins and 3 Sweeps Coins into your Legendz account.
Tax Principle – when Does a Taxable Event Occur?
The moment Sweeps Coins are redeemed for real prizes, the Internal Revenue Service (IRS) generally treats that prize as taxable income. Gold Coins aren’t charged as taxable income because they can’t be redeemed and possess no real money value.
A majority of sweepstakes state in their rules that it’s the responsibility of players to report all prizes received through redemption as taxable income for the year they receive it.
In essence, playing with Gold Coins for entertainment purposes and receiving Gold Coins and Sweeps Coins without redeeming them doesn’t lead to a taxable event.
Does Legendz Charge or Withhold Taxes?
Legendz’ policy shows that the sportsbook doesn’t deduct any tax when players carry out Sweeps Coins redemption. Instead, social bettors are required to report all redeemed prizes as taxable income to the IRS. Only real prizes that have been obtained from redeemed Sweeps Coins are treated as taxable income.
In most cases, Legendz may issue a tax form for larger redemptions or when required by law. This doesn’t mean you’ll be charged tax, but that Legendz is simply reporting your redemption to the IRS because it met a certain threshold. For prize redemptions under $600, players themselves will have to keep track.
While for redeemed prizes worth $600 or more, Legendz may issue a Form W-2G. This form makes it easier to report all redeemed prizes. Players will have to request this form through customer support.
Our Legendz social sportsbook review shows that redemption usually requires identity verification, which means documentation will be collected and could be used to generate reports when certain thresholds are met.
While bettors often wonder if Legendz social betting for real money is possible, it’s important to understand that Legendz social betting for real money isn’t applicable since only virtual currencies such as Gold Coins and Sweeps Coins can be used. Real money becomes a factor when Sweeps Coins are redeemed for cash prizes, which may, in turn, create tax obligations.
Requirements for Reporting Legendz Taxes
In our Legendz social sportsbook review, we discovered certain conditions have to be met before filing your taxes. Legendz requires its players to verify their accounts before redemptions can be processed. The IRS, on the other hand, requires players to report taxes for prize redemptions exceeding $600 annually. Here are some of the requirements explained:
- KYC verification: players will have to upload documents proving their identity and address. An approval usually occurs within 24 hours.
- Phone number verification: after registration has been completed, players will need to enter a one-time code to confirm their phone number.
- Threshold reporting: the IRS requires players to report all redemptions with a total of $600 or more in a year.
Tips for Handling Legendz Taxes
After speaking to a couple of players, we discovered a lot of them didn’t keep track of their transactions and didn’t even have any idea they needed to report cash prizes on tax reports. To avoid such issues, we’ve put together some tips to help with taxes at Legendz:
Keep a Log of Wins
It’s possible to download your redemption history from the Legendz social betting app regularly. You can write down dates, prize types, and amounts to ensure you have a proper record. This also includes payments and prizes redeemed. This can help you report income accurately to avoid under-reporting your rewards.
Track Your Thresholds
If by any chance you’re nearing the $600 repayment threshold, you should be prepared to file a Form W-2G. So make sure to always monitor your redemption amounts.
Seek Assistance from A Tax Professional
Since each state has unique tax laws, it’s best to consult a tax professional who’s familiar with your state’s regulations to avoid issues when filing your taxes.
Legendz Taxes and State Laws
While Legendz doesn’t withhold taxes, you’ll still have to report and pay taxes depending on your jurisdiction. This means that aside from following federal tax laws, players will also need to comply with tax regulations in their specific states. Let’s take a look at some states and how they handle taxes on rewards:
South Dakota
South Dakota imposes a 4% tax rate on all prizes redeemed from Sweeps Coins. This means that Legendz players in this region will also need to account for this state tax as well as federal taxes.
Texas
For Legendz players in Texas, the state doesn’t impose any state taxes, which means that redeemed prizes at Legendz aren’t subject to any state taxation. However, federal taxes still apply, so make sure to report your prizes to the IRS.
California
In the state of California, all redeemed prizes are considered taxable income. Players are expected to report those prizes on their state tax return. Although California doesn’t impose a separate tax, redeemed prizes are taxed as part of a player’s overall income.
Pros and Cons of Legendz Taxes
Here are some of the advantages and disadvantages of Legendz taxes:
Pros
- No automatic tax withholding
- Transparent redemption rules
- Easy tracking of redemptions on the Legendz social betting app
Cons
- State tax rules vary
Conclusion – Legendz Doesn’t Tax Bettors, but The IRS Might
In short, Legendz doesn’t withhold tax when social bettors redeem Sweeps Coins. Users will always receive the full value of their redeemed prizes.
However, once Sweeps Coins are redeemed for real prizes, the IRS considers that amount as taxable income. The player is then left with the responsibility to report any redeemed prize received for the year. For prize redemptions worth $600 or more in a year, Legendz may issue its players a Form W-2G.
Players should keep proper records of all redemptions to avoid issues when filing tax reports. Although federal and state tax rates may differ, they both apply to the total tax. Always confirm what rules apply in your state.
Now that we’ve established that Legendz doesn’t charge its bettors any tax, you can click the banners on this page to visit the official Legendz site and begin your social betting experience today.
