This should end all of the false claims about paying US taxes on poker

[AmIAFishy2?]

well we're obviously not talking about big winners here...and i never said that youd make the log book in one session, youd just make it as you went throughout the year, picking random numbers that didnt look suspicious. Oh and the cardroom is pretty close to where you live, easily within driving distance...no one even knows your name at the cardroom, youre pretty quiet. So yeah, you live close to the place where you play so most of what you said wouldnt apply, heck they dont even have a pitboss half the time and he wouldnt know your name anyway...theres lots of players, new faces all the time....

well i guess i got my answer, this would be an easy thing to pull off as long as you werent a complete moron. Odds against getting caught if you're smart and its small amounts? 5000:1? over/under?

[cardcounter0]

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Libutti v Comissioner includes many non-cash comp items as taxable to the taxpayer. The list of items given to the whale include: automobiles, vacations, jewelry, champagne and entertainment tickets.

A quick search through my research came up with this unsourced quote: Gambling casinos often provide their customers with complimentary goods and services (“comps”) to encourage future patronage. IRS says that extraordinary comps, such as autos and jewelry, are taxable income. But it reserved the question of whether “normal comps,” such as food, drink, lodging, and entertainment, can be excluded from income as purchase price adjustments.

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Do you have a link to this case? I can't find it. It seems the key to the taxability is "extraordinary comps". It would be nice to see where that line can be drawn.

Notice the IRS is again fuzzy. They list as "normal comps" entertainment -- yet the whale is given a taxable list that includes entertainment tickets.

So when is a comp "normal" and a rebate, and when is it "extraordinary" and taxable. I would like to study the case.

I also found a distinction between comps that are given for gambling, and comps that are given to "induce" gambling.

[snoop01]

so i can't do this right??

I won $49,305.00

but i deposited $40,330

for a profit of $8975 for 06'

I can just claim the profit of $8975?? I have to break down how i got those numbers individually?

Also I played on some sites that no longer allow US players to access the sites. I didn't keep logs as I was just going to grab them and enter the data when I started filling out my tax information. What should one do now?

PS my main money site both + and - is still active.

Any insight would be great..... Thanks

[Niediam]

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FPP's only count as income if and when you cash them out/buy stuff with them.

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FPPs, like casino comps, as long as they are not in the form of direct actual cash, are not taxable.

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Do you have a site for your claim?

In the Gamblers Guide To Taxes by Lewis the author references a court case where it was ruled that casino comps are taxed as gambling income.

I'll try to explain the difference between receiving a rebate for a purchase and a comp but I might not to express the concept very clearly.

The compairison of comps to a rebate doesn't work here because with rebates the money has already been taxed but with comps that is not the case. When you get $2000 rebate on your new car purchase that money was already taxed once - mostly income tax from your job.

When you receive a comp from a poker room (and this applies equally well for rakeback) the money hasn't been taxed yet. Let's say we deposit $500 into stars. We run well win enough pots to run our deposit up to $1000. But of course Stars needs to make some money so lets say they rake $100 so we have $900 in our account. Now of course we owe taxes on the $400 profit that we have won (lets ignore the whole 'session' issue now for simplicity).

Notice that we don't pay taxes on the $100 that we paid for rake. The money wasn't money taxed before our deposit as we still have the initial $500. The $100 won't be taxed on our next return because the IRS doesn't tax us on the money raked by the sites. Stars then gives us a a brand new $25 twoplustwo book because of our play. Yes you can view it as a 'refund' of our rake but that money hasn't ever been taxed and of couse our fine government would like its share.

To try and put it really really simply: when you receive a rebate from puchasing something you don't actually end up with more than you started with. You start with X amount of cash and end up with some amount of cash plus goods which equal the amount of money you started with. No gain = no tax. When you use your FPPs on Stars for that $100,000 you certainly have material gain and will owe taxes.

[cardcounter0]

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In the Gamblers Guide To Taxes by Lewis the author references a court case where it was ruled that casino comps are taxed as gambling income.


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Again, I would like to see a link to the specific case. Because I have never seen the IRS asking people who have gone to Vegas where is the income from the free drinks or comped meals. What is the fair market value of a "I [img]/images/graemlins/heart.gif[/img] Harrahs" keychain?

[Niediam]

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In the Gamblers Guide To Taxes by Lewis the author references a court case where it was ruled that casino comps are taxed as gambling income.


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Again, I would like to see a link to the specific case. Because I have never seen the IRS asking people who have gone to Vegas where is the income from the free drinks or comped meals. What is the fair market value of a "I [img]/images/graemlins/heart.gif[/img] Harrahs" keychain?

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Thats because the IRS doesn't really care about those things. We are talking about Stars sending you a new computer not a PokerStars mousepad.

[cardcounter0]

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Thats because the IRS doesn't really care about those things. We are talking about Stars sending you a new computer not a PokerStars mousepad.

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Absolutely, so where are they going to draw the line?

Mousepad > Hat > Shirt > Book > Tickets > IPOD > TV > COMPUTER > Personal Jet > Private Island

And does amount of effort or play matter? If I spend 365 days online and get a certain comp is that "normal", if I just browse the website and get something, is that income?

I'm sure the findings on some of these cases touches on these factors.

[Niediam]

Safe thing of course is just to report everything.

Using some sort of common sense method I'm though I'm sure will be fine because even if the IRS says you did it wrong they arn't going to throw a fit. Something like "report if it costs more than a date to the movies" or "report it if you would be upset if the item didn't arrive".

[EMc]

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In the Gamblers Guide To Taxes by Lewis the author references a court case where it was ruled that casino comps are taxed as gambling income.


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Again, I would like to see a link to the specific case. Because I have never seen the IRS asking people who have gone to Vegas where is the income from the free drinks or comped meals. What is the fair market value of a "I [img]/images/graemlins/heart.gif[/img] Harrahs" keychain?

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Robert Libutti, TC Memo 1996-108, Code Sec(s). 165 is the full name, try searching some law databases or something. I see it through a pay service, so that link will do you no good.

[AmIAFishy2?]

[ QUOTE ]
Safe thing of course is just to report everything.

Using some sort of common sense method I'm though I'm sure will be fine because even if the IRS says you did it wrong they arn't going to throw a fit. Something like "report if it costs more than a date to the movies" or "report it if you would be upset if the item didn't arrive".

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I would be very upset if my mousey pad didnt arrive. [img]/images/graemlins/frown.gif[/img]