Tax question...

[wrschultz]

I'm probably pretty far off here, but I was thinking today that rake could possibly be deducted from federal income tax? I don't know very much about tax law, and wont be filing any poker winnings until April 07, but this would obviously save alot of us tens of thousands of dollars in taxes over the year.

Thank you for the help.

[Misfire]

I'm pretty sure rake goes along with your gambling losses. It's an itemized deduction, but your total gambling deductions cannot exceed your total gambling winnings. (If you win $1000, but lose $800 and rake $500, you can only deduct $1000.)

[prohornblower]

in that case can't you only deduct 300?

[broiler]

The rake is deductible, but it likely that you have already deducted it when you record your session results. In order to make it a separate deduction you would have to gross up every pot that you won for the rake taken from the hand. Since nobody is going to do that, you have already deducted the rake.

[LondonBroil]

This has been brought up numerous times every year over in the internet gambling forum. Broiler is correct. Your line of thinking would be deducting the rake twice, since it's already been deducted from your winning session total.

[Misfire]

[ QUOTE ]
in that case can't you only deduct 300?

[/ QUOTE ]

No, you can deduct everything but $300. Your deduction for losses can't exceed your winnings. In my example, $1000 was won (gross), so $1000 is the max loss you can deduct, not the $1300 you actually lost.

And broiler is right, the rake is most likely already included in your results (unless you're really tedious about how you keep records). I could see counting rake seperate if you were exclusively a tourney player, but there's not much point.