1st time live
 

ok..I posted this in general but then after browsing saw it might fit in this forum better...how do cardrooms deal with taxes?if you start with like $3000 and cash out with $6000 do they keep record or do i just add it to my journal of online play and settle at end of year..are there any forms to fill out?.thanks for any help

Re: 1st time live
 

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just add it to my journal of online play and settle at end of year

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Only exception, I believe, is if you cash out more than $10k at a time, or win more than $600 in a tournament. But higher-stakes players will know more about those details than I can provide.

Re: 1st time live
 

DISCLAMER: I am not a tax advisor I just condiser my self knoledgeable in this area of the gaming industry, check with a tax advisor to be sure of your reporting laws in the state where you live/play.


Cashouts (or Buy-ins) that total $10,000 or more in one gaming day (this includes all cashouts added together, or all buyins added together) or where an 'agent' (i.e. any intermediary, spouse, girlfriend, boyfriend, backer) are used are by law to be reported to the I.R.S. (Before a casino can allow the transaction that would excede the $10,000 threshold, the will need to have photo ID and your SS#) to aide in the decection on fraud, money laundering, and other such illegal ventures. This is called an MTL and there is some paperwork for the casino to do in this case (recording all transactions that you have made during the day for one). In this case there is no paperwork that you take home with you.

The other thing mentioned is the $600 limit on tournament payouts.
What this really is, is anytime you win a jackpot, bad beat jackpot, high hand, monte carlo board hand, tournament payout, ect. where your payout is in excess of or equal too $600 the casino is required (before giving you any money) fill out a "W2-G" form, the form requires you give them your SS#, and they also must make a photocopy of your ID (at least anywhere I have played) this form is then signed multiple times by you and you are given 2 copies to take home with you (others are filed with the IRS and the state where the money was won if you are in a state that has a state income tax). This get filed along with your taxes as other income I belive, I am a little fuzzy on that one. The W2-G however is the same form used when a player wins a large jackpot on a table game or a large slot jackpot. There however the number is not always $600 but is based on both the size, the payout odds on the hand/spin, and the size of the bet. In poker this all defaults in the things mentioned above (bad beats, tournament payouts, high hands, ect.) to the $600 minimum for such a form.

Jasper_C

Re: 1st time live
 

The $600 dollar thing must depend on where you live/gaming regulations etc. Here it is 1200 or more that triggers a W2-G.

Re: 1st time live
 

I believe the correct interpretation is $1200 for slot machine payouts, but $600 for any poker room promotional payouts or tournament wins. This I believe is part of the Federal Tax Code, so it should be applicable everywhere, but YMMV.

Re: 1st time live
 

The data point I'm going on was a limit HE tournament at the Bike in Bell Gardens, CA where I made the final table. Everyone was very eager to redistribute their winnings so as not to go over $600. (I was naive and kept my $705 for second place split by chip-count.) It was quite amusing; I guess none of them declare gambling on taxes anyway.

Re: 1st time live
 

The cage is required to report transactions =>$10K in a 24 hour period. It is not reported to the IRS for tax reporting. Reporting your income for taxes is your responsibility. It is no different than if you were to deposit =>$10K at your local bank.

I agree that MTT wins being reported varies by location, as I have several "thousands of dallors" cashes that have never been reported with a W2G in AZ or NV, but have been nailed in CA for a >$600 cash.

Re: 1st time live
 

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I believe the correct interpretation is $1200 for slot machine payouts, but $600 for any poker room promotional payouts or tournament wins. This I believe is part of the Federal Tax Code, so it should be applicable everywhere, but YMMV.

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Alas, it isn't straightforward and that's why what places do is all over the map. In Vegas, I think it's only Harrah's that W2G's tourney winnings. Some Harrah's exec claimed in an interview that when Harrah's bought Binion's Horseshoe they became bound by the Binion's Agreement and now must withold at $600. MGM and Wynn and everybody else I guess has folks looking at the actual regulations which seem to strongly suggest you don't have to withold unless the winnings exceed something like 300 times the buyin. But then look around more and you'll find the interview with the IRS agent who says MGM and everybody else are fooling themselves and will be brought into line just like Harrah's.

Regardless, casinos don't try to track your winnings. The >$10K cash transaction report simply says how much you turned from chips into cash. It doesn't say how much you bought in for. 'Course if you're auditted and the IRS pulls that form out and asks "what was the cost basis for this $12K transaction?" and you don't happen to have that written down in your gambling logbook, you may find yourself paying taxes on the full $12K and the audit turning uglier.

Re: 1st time live
 

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Some Harrah's exec claimed in an interview that when Harrah's bought Binion's Horseshoe they became bound by the Binion's Agreement and now must withold at $600. MGM and Wynn and everybody else I guess has folks looking at the actual regulations which seem to strongly suggest you don't have to withold unless the winnings exceed something like 300 times the buyin. But then look around more and you'll find the interview with the IRS agent who says MGM and everybody else are fooling themselves and will be brought into line just like Harrah's.

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My understanding of the Binion's Closing Agreement (which everyone followed until about 2000) calls for w2-gs to be issued for all touranment payouts of $600 or above in exchange for never withholding regardless of the size of the payout.

There are a lot of poeple that say the Binion's Closing Agreement is a bad deal.