Quick WSOP Tax Question

[mikeyworm]

Harrah's gave me a W2-G for placing in a 2000 WSOP event (2325). I played a 200 dollar satellite to get into the event. Can I claim 2000 dollars as my gambling losses or 200? Thanks.

Jason

[Fireball_AA]

It should be the same if you declare both online and live events. Not sure if the Sat was online or not.

You start with 200. Win a 2000 seat : Win 1800
You play a 2000 event and win 2325 : Win 325
Total : 2125 of winning.

[DVaut1]

[ QUOTE ]
Harrah's gave me a W2-G for placing in a 2000 WSOP event (2325). I played a 200 dollar satellite to get into the event. Can I claim 2000 dollars as my gambling losses or 200? Thanks.

Jason

[/ QUOTE ]

1) Wrong forum.
2) As for your specific situation, I cannot answer.
3) Given a similar, hypothetical situation...

If a player entered a satellite to get into the $2k WSOP event, won a seat in said satellite, then cashed in the WSOP event for $2325, the player participated in 2 discrete sessions.

So here is what the hypothetical player's gambling diary should look like:

Session 1: ($-200 sat. buy in) + ($2000 win for the seat) = $1800 income

Session 2: ($-2000 buy in) + ($2325 prize) = $325 income

So, this hypothetical player's total income should be reported as $2125. Note that if this is the only gambling the player had done in the year, there are no losses to report.

This is not tax advice. Consult a CPA.

[Lloyd]

If you file as a professional gambler:

You'll include your net earnings from these two separate events. So you paid $200 for a satellite. You won a $2,000 seat. You then paid $2,000 into a tournament and won $2,325. So in total you paid $2,200 and won $4,325 so your net earnings would be $2,125. It's the same net affect as taking the $2,325 you won less the $200 you paid but it's the more technically correct approach.

If you do not file as a professional gambler:

You will claim as income $4,325 - both the $2,000 you won to get into the tournament and the $2,325 you won in it. You will also include in itemized deduction the $2,200 you paid to enter these events.

True net income is the same whether you file or not but it can have a substantial impact on what you owe depending upon which route you take. Most people, even successful online players, might have a hard time meeting the criteria as a professional gambler.

As always, seek professional advice in this area.

[DVaut1]

[ QUOTE ]
If you do not file as a professional gambler:

You will claim as income $4,325 - both the $2,000 you won to get into the tournament and the $2,325 you won in it. You will also include in itemized deduction the $2,200 you paid to enter these events.

[/ QUOTE ]

Lloyd,

I'm not quite sure this is correct. I believe the non-professional taxpayer can, when reporting tournament play, substract the buy-in from the prize when reporting session income (what the non-professional can't do is, at the end of the year, merely net their sessions and report the difference).

Therefore, if you were to finish first place in a $10 SnG on Party, you would report $39 of income for the session ($50 prize - $11 buyin), rather than report $50 of income and deduct an $11 loss (assume 'you' = a hypothetical non-professional player, not necessarily mod Lloyd).

[Lloyd]

You're correct.

Session 1: Spent $200, won $2,000 - Net $1,800
Session 2: Spent $2,000, won $2,325 - Net $325

Not sure why I made it more complicated than it is. Oh, that's right. Because it's too damn complicated.

[scottc25]

I AM a CPA (inactive license. OK I have to say that on my business cards), and I still don't pretent to get it. Don't feel bad.

I have a sneaky suspicion that if someone say satellites in the ME from a $1k sat at the Rio and then goes on to cash for $20k they are going to use the $10k receipt as back-up so they would do this:

$20k won
less: $10k buy in (your receipt for the tournament)
$10k profit.

Definately not legal but I can see non-professionals doing this.