Taxes question - what is the definition of a session?

[spino1i]

It seems like how much you pay in taxes is dependant on how you can declare your sessions..

If I played poker for a while then stop for 5 mins to take a cigarette break, then come back and play, would that be considered two sessions?

How long do you have to stop playing for it to be considered another session when you start up again?

[RED_RAIN]

i consider a full day regardless of breaks, time whatever.

maybe not right, but it's what i'm going to do regardless

[Dave H.]

FWIW, I have a CPA whom I happen to believe is excellent. I have read the tax laws regarding this at length, and so has he. He has assured me that, although not "spot on", tracking wins and losses BY DAY (as Red Rain does) is fine as long as your "tracking" calendar can be produced if necessary. He has lots of clients (and I've checked this out) who claim B&M and Internet wins/losses. Very few have been audited and my CPA's claim is, once again, that the IRS has no problem with one day as one session.

He does emphasize, once again, that this is not "spot on", but a good faith attempt is what counts.

[theRabbit]

Just my thoughts.

I think you advise is good. However..

While I believe reporting on a day by day basis may pass the common sense test, I am unaware that this is settled law. I think by following your advise it's unlikely someone will have serious problems (at least criminally). But that is just my opinion.

However, if you are audited and for what ever reason (ex. disapproves privately of gambling) the auditor doesn't agree, and say, disallows some are all of your losses as itemized deductions, disputing an audit can be a long an expensive battle with a largely autonomous agency that has unlimited time and resources. Once numbers go into the IRS computer they can be difficult to get changed.

Also in at least three cases how you report your sessions could impact on you total tax liability independent of your net winnings.

1) If you don't itemize.
2) Your winnings (not netted and declared as income) can subject you to the dreaded alternative minimum tax.
3) Your income from social security would have been tax free and now becomes taxable even though you have little or no net profit for the year.

There may be others.

I think the problem is that the government has ambivalent feelings about poker and other gambling and its morality, and treats it differently than say stock trading which is really just another form of gambling. (IMHO) This results in what is essentially a hidden added gambling tax.

Also, a large proportion of the 100 million+ people that gamble to not report gabling winnings at all (probably in large part because they don't understand the law) making it unfair to those who try to comply with the law.

Personally, I think it would be fair (and suspect most that read this orum would aggree) to be able to net your wins and losses together before declaring it as income (like stocks). That way as long as you accurately record and report wins and losses (on say a daily basis or what ever is deemed proper) things like the definition of session would not be important and issues like these would not arise.

I could go on but that's enough for now.

[MicroBob]

terrific post.

[Fryguy]

[ QUOTE ]
i consider a full day regardless of breaks, time whatever.

maybe not right, but it's what i'm going to do regardless

[/ QUOTE ]

A session for me is 1 day 1 limit. If I play for 5 hours in the morning, and go out for the day, then come back and play 2 hours after dinner, that's 1 session.

Sessions that wrap around past midnight are for the previous day for me.

Different limit = different session.

[BigPoppa]

That's a place where the tax code doesn't keep up with the internet age. The rules were in place for B&M gambling where a session started when you got there and ended when you left. I doubt they would consider taking a smoke break to be starting a new session.

If I'm multitabling at one site and move multiple times when tables break, I consider that all one big session.

But what if I have multiple sites open?

What if I play multiple times at one site throughout the day?

[jman220]

[ QUOTE ]
That's a place where the tax code doesn't keep up with the internet age. The rules were in place for B&M gambling where a session started when you got there and ended when you left. I doubt they would consider taking a smoke break to be starting a new session.

If I'm multitabling at one site and move multiple times when tables break, I consider that all one big session.

But what if I have multiple sites open?

What if I play multiple times at one site throughout the day?

[/ QUOTE ]

What if you leave the site's software open overnight? I'm thinking about testing this theory.

[Niediam]

That is definately not the definition of a B&M session See this link to start even though there several IRS rulings on the subject which would contradict your statement:

http://www.gambling-law-us.com/Artic...ng-Session.htm

It also seems clear to me that the 'one day for online play' is clearly not a session based upon IRS rulings... but the real question is if they are going to try and nail people for it or just say 'well, that's close enough.'

[iceman5]

I love all these tax questions. Heres what I want to know.
Lets assume Im a casual poker player like most non 2+2 ers.

I dont have pokertracker. I dont keep records. I dont get a W-2G from anyone. All I know is that at the end of the year I won $XXX.

What is the IRS going to do when I report that number? Audit me? They need records to audit you and the only records I may have is my bank statement showing withdrawals from Neteller and those withdrawals are going to match the number that I report as income.