[buddypup]

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Tax question: If a person wins a big tourney for say a million dollars (no Brad Booth joke intended), then went busto trying to play nosebleed stakes in the same fiscal year, would that person still be responsible for paying taxes on his tournament winnings?

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If you file your taxes as a "Professional Gambler", you can deduct cash losses from tourney winings. My accountant deals with a lot of gamblers, and advised me to open an account at the Commerce Casino, and one at the Wynn (I won considerable cash in tourneys at both casinos). When I play, I withdrawl from my account about 2k at a time, and keep records to show cash losses.
When I was a normal guy making regular money, my normal accountant told me that I can only deduct my tourney entry fees against the winnings.
I will know for sure what you can and cannot do, as I am currently getting audited and there are a lot of questions from the IRS regarding the $$ I have won. The only thing I learned is that your accountant can give you wrong, bad advice all day long, and is never held responsible.