re: tax question - gambling

thanks

quote:

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bodog, merge network

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I checked bodog a couple of days ago and got a "This domain name has been seized by the US Dept of Justice" message.

Are you a professional poker player? If so, then you would report your poker playing activies on Sch. C. If you are not a professioan lpoker player, then you wuld report your net winnings from gambling as Other Income on Line 21 of Form 1040.

The penalties for claiming dissallowed deductions are far less than than the penalties for hiding revenue. The CPA's on here can correct me if I'm wrong, but I would declare any money recieved and deduct the losses.

Dissallowed deductions = paying back in with interest and penalties

Tax Evasion = time served

Not a chance I would be willing to take.

You have 2 options:

Option 1: Declare yourself as a pro. Advantage is you can claim your losses. Disadvantage, you are all but guaranteed an audit. You can never switch back, so you will always be an IRS target. I think you also pay a higher rate.

Option 2: Don't declare yourself as a pro and you must claim all earnings, regardless of your losses. So if you cashed out for 100 bucks this year, but lost a grand trying to get that one cash out, you claim extra income of 100 bucks. Advantage, no IRS.

Source: years of browsing poker forums and online play. twoplustwo.com is an excellent resource. I would recommend checking there over here for advice in that realm. There are legit posters there that know the ins and outs of the life.

I'm on 2+2 daily, thanks for the info.


Also, there aren't any losses since you play well inside of your bankroll. It is all pure profit. What would be the threshold to declare yourself as a professional?

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Also, there aren't any losses since you play well inside of your bankroll.

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It's not quite that simple. I'll use horse racing, since that's what I'm familiar with. Say over the course of the year, you make $1000 worth of bets and come out $100 ahead. Instead of declaring $100 in income, you're supposed to declare $1100 in winnings and offset it with $1000 in losses, and you'd better have it documented in case of audit (not as hard as it sounds, the online site I uses keeps track of all that for me.)

Not sure how that translates to poker, I assume they don't expect you to record every winning and losing hand. Possibly by session, though.

buy a safe put the cash in the safe problem solved.