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From Tomcruise [ QUOTE ]
Guys, get a grip, you will pay taxes on what you net, I've won lots playing live and online. I have an accountant, and all we do in april is figure out, roughly how much did i net?, ok can i roughly prove it?, fine. Then there is like one line on the tax for where i write , gambling winnings = 100k. End of story. chill out.
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Be careful. I'm pretty sure you can get hit pretty hard if audited. Unless you file as a professional gambler (which is often rejected by the IRS anyway), you are required to report the sum of all winning sessions (unfortunately, it's not 100% clear what constitutes a session) as gambling winnings. This amount is included in your Adjusted Gross Income (AGI). If you choose the itemize your deductions you can then include a deduction for gambling losses up to the amount of your winnings.
If you have 100k in non-gambling earnings, 100k in gambling winnings, and 80k in gambling losses, your AGI is NOT 120k ... it is 200k with an 80k deduction. These may seem like the same thing, but the higher AGI can influence eligibility for a number of other deductions, and could trigger the alternative minimum tax. You also lose the option to take the standard deduction.
Finally, if your records for losing sessions are incomplete or suspect, you may be hit with additional penalties.
Note: I am not a tax or legal expert ... just did some recent research on this issue.
I seem to have lost most of my links, but here are a few:
http://www.onlinepokerfaq.com/guide/us-taxes.html
http://www.taxabletalk.com/gambling/
http://www.casinogaming.com/features/taxlaws.html
http://www.markpilarski.com/column43-2.html
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What exactly is a winning and losing session??
Do i submit my poker tracker database and show that i have joined about 5000 different online poker tables in 2007 with 3000 winning sessions and 2000 losing sessions, and then do i report that i played 1000 tournaments and lost 200k playing them, but at the same time won 265k playing them, utterly ridiculous guys, i just give them a rough net and a rough cut of their own.....TRUST me...they don't wanna deal with someone like me for the same reason that they don't want a bunch of bullshitters showing up the IRS trying to write off tons of bogus non existent unprovable gambling losses, they just want nothing to do with it....i just need to make myself accountable for the fact that i have cash assets and other hard assets appearing up out of nowhere.