My roommate told me that he met someone at an MGM casino who won $100,000. That person told my roommate that he does not have a social security number to turn his winnings into cash. He made a deal with my roommate to share the winnings 80-20. My roommate will get $20,000 of the winning money if they take the cash with my roommate's social security number. My roommate accepted the deal and got his money. He then used it to pay off his car loan.
Was that a good deal? I looked up online that tax on gambling winnings are 25% which is more than the money that my friend got. I am not sure how it works though, because I have never gambled before and never had to pay taxes on gambling winnings.
Is there a deduction that my friend can use? He is an Uber driver, and he is married with 2 kids.
Edit: I asked him again last night about the details and he told me that the casino held $30,000 of the $100,000 that they won.