If the gambling was legal and the necessary taxes were paid on the winnings, such funds can be used in an EB-5 investment. The source-of-funds documentation for gambling winnings might include a copy of the bank check, bank statements, the relevant Internal Revenue Service (IRS) form issued by the payer of the winnings, and any other document that demonstrates where the funds came from.
For funds to be eligible for EB-5 investment, they must meet several basic eligibility requirements, including that the investor legally owns the funds and that the investor legally obtained the funds. Therefore, it is important to include source-of-funds documentation from the casino, betting parlor, or relevant organization to confirm the win and bank statements that show the funds being deposited in the investor’s account.
Investors should also confirm that the organization is registered and operating legally. If the organization is located in a different country, it must be registered to operate in the country in which the investor won the funds. Additionally, investors should be prepared for United States Citizenship and Immigration Services (USCIS) requiring proof that they legally obtained the funds they used for gambling, especially if the investor spent thousands of dollars.
Because of the complexity of tax law related to gambling, investors should consult a tax professional to confirm whether their taxes are in order. Different forms need to be submitted for different types of gambling, and federal, state, and local taxes may be payable on winnings.
When preparing source-of-funds documentation, it is best to work with an experienced EB-5 immigration attorney to ensure that I-526 petition submission goes as smoothly as possible. Gambling winnings are an uncommon source of EB5 investment funds, so the safest course of action would be to work with legal and financial professionals to increase the likelihood of positive adjudication.