This should end all of the false claims about paying US taxes on poker

[Lottery Larry]

[ QUOTE ]
So to clarify, if I am playing say 5 tables of a cash game in "one sitting" during one day, I would have played one session and thus would report the net winnings or loses from that session. Or is each table I played considered an individual session?

[/ QUOTE ]

I assume you're talking about online. Yes, as I read the IRS regulations listed, each table is an individual session in B&M and therefore will be treated the same in virtualland.

If and when the IRS comes out with specific online poker details, I think that's the only safe (and most accurate) way to interpret the existing requirements.

Personally, I doubt that the IRS is going to write clear guidelines about online gambling any time soon, given the current DOJ stance and legal environment.

Now, to be clear, I'm pretty sure you're not required to send in the detailed session breakdown with your tax return each year. These are records to back up your summed miscellaneous income and gambling deductions, if the IRS would ever come calling.

[cardcounter0]

[ QUOTE ]
Yes, as I read the IRS regulations listed, each table is an individual session in B&M and therefore will be treated the same in virtualland.


[/ QUOTE ]

That is a big stretch. Most people use only 1 computer monitor.
[img]/images/graemlins/wink.gif[/img]

[Lottery Larry]

[ QUOTE ]



[/ QUOTE ]

That is a big stretch. Most people use only 1 computer monitor.
[img]/images/graemlins/wink.gif[/img]

[/ QUOTE ]

smartass :P

[Lottery Larry]

[ QUOTE ]
Russ Fox maintains that this would be five sessions. I strongly disagree with this and I think if it ever got to court I would be proven correct. YMMV.

[/ QUOTE ]

Strongly disagree based on what, exactly? I couldn't find anything but this:

"-List cash per 'time spent at the computer on each site'. If I play on Stars for 2 hours, I list the minutes I spent (roughly), stakes, and what I won/lost, taken from the cashier. I'm not about to track this for each of the 4-6 tables I play 10-100 hands on at any given time, especially since I usually play on Small Site X rather than Stars, and I think this is as much of a requirement as a court will ever impose on a *recreational gambler* "

Can you match this presumption up with the details in my post below?

http://forumserver.twoplustwo.com/sh...age=0&vc=1


How about some examples of what you might do?

Let say you play three $3/6 tables, one $10/20 table (major fish schooling, you took a shot), a $1-5 table and four $4/8 tables in your 2 hours on Stars? (I'm making up the table limits, don't be picky).

What example record would you put together?

I still don't see what's so hard about several entries such as this:

Table 33245983824
Start time: 21:04
End time: 21:40
Limit: $X/X
Buy-in :
Cash out:
Amount won/lost $15,250 (someone autoraised you with the second-straight flush [img]/images/graemlins/wink.gif[/img]

Online, you could have a preconfigured spreadsheet open and take a few seconds, in between folded hands, to do this. It should be much simplier than B&M.

Hell, it would sum ongoing totals for you, if you spend the time beforehand to set it up. That would probably be a good tool for an online gambler to use, removing all questions about how you are doing at a particular game level.

[adanthar]

Larry,

The problems with doing it that way are as follows:

-I don't play cash on Stars. Rather, I play it on, by and large, sites with no PT support (and in some cases with no saved hand histories at all). That removes the PT tracking option, which makes this an order of magnitude more complicated.

-I don't usually play at different stakes (although when I do, I do usually differentiate them out for other recordkeeping purposes.) Instead, much like 90% of the online pro population, I play, say, 4 tables of the same stakes (or 6, or 8, or 12.) However, I don't spend the entire session at each table because they open and close frequently, fish leave, etc., so each 3 hour session of '4 tabling' more frequently has 8-10 tables listed. One or two of these might've been open for 3 hours, one or two might've been open for 3 hands, and the rest are in between.

-Of course, if we're 12 tabling, this gets an order of magnitude more complicated; anything over 6 tables means that you cannot even record the table you just closed before 3 others are beeping at you. Even if we're merely 6 tabling, at this point, the recordkeeping takes up as much attention as playing the game.

-The crux of the issue is what the word 'session' means. It is indisputable that a 'session' at B&M is different than a 'session' on the Internet, and that, in common trade usage, a 'session' online has come to mean "X hours of sitting at a computer playing Y tables at Z stakes". The IRS guideline for a session accurately sums up a B&M pro's session; however, no reasonable Internet poker player, recreational or pro, would sit down at his computer, open up 8 tables, play for 4 hours, carefully sum up his records and deduce that he has played 47 different sessions during this time period. This is not meaningless, and, in fact, is often how a court will resolve a dispute in a contract matter where a single word determines the outcome.

Also, keep in mind that this logbook is not the only piece of evidence you have in an audit; it will be supported by the site's cashier tab, which is incontrovertible evidence as to the maximum amount of money you have ever made at that site. At this point, there is no room left to disallow losses, so the only thing that the worst IRS agent in the world can quibble over is the amount of gross profit - losses, which the logbook should be more than detailed enough to overcome.

[I_C_ALL]

Just wanted to add that I've read setting up a corporation(S election or LLC) may "aid" in proving the gambling is professional. There would obviously need to be a profit(I read somewhere about 3 years worth), but this method would also decrease the self-employment tax burden. You are only required to pay self-employment tax on the amount you take as a salary. This can usually cut the amount of self-employment tax in half or quarter depending on how aggressive you want to be.

I'm told by CPAs that corporations are handled separately(1120S)from individual returns(1040) and that they are SIGNIFICANTLY less likely to be audited. I AM NOT RECOMMENDING NON-COMPLIANCE, but I would much rather pay my "fair share" and NOT get audited than try to argue with a grumpy agent about the definition of a session, not to mention the cost and stressed involved in an audit.

[boondoggle]

Why don't the tax nazis just give information and let us decided what to do...thanks.

cheers
Boon

[NickMPK]

Aren't taxpayers allowed to resolve ambiguities in the tax law in their favor? It seems like since "session" isn't defined, each taxpayer could define it in any reasonable way they like.

[Lottery Larry]

I didn't realize online play was so chaotic/fluid. Given that description, it does sound very difficult to match the table=session definition in the IRS regs.

Maybe an online session could be X hours played at one level?

I played at tables 23, 34, 45 and 38 for 3 hours ($3/6 level) and won $X amount? That might work for the IRS, who knows?

If anyone has discussed this with the IRS, or a CPA that isn't telling you to net wins/losses or not report at all, let us know.

[adanthar]

[ QUOTE ]
I didn't realize online play was so chaotic/fluid. Given that description, it does sound very difficult to match the table=session definition in the IRS regs.

Maybe an online session could be X hours played at one level?

I played at tables 23, 34, 45 and 38 for 3 hours ($3/6 level) and won $X amount? That might work for the IRS, who knows?

[/ QUOTE ]

That's basically what I do (I don't list individual tables, but do sort it by stakes - it doesn't add much complexity and I like knowing how I'm doing at each level.) Basically, doing less than this doesn't pass the smell test, but doing more than that is not merely ridiculous; IMO, it even calls into question whether you're a recreational gambler or a pro (because is a guy who plays as a hobby really going to list everything in that much detail?)

Anyway, compared to the 9/10 people that are netting gambling wins/losses entirely because their CPA's tell them to (lol), anyone who keeps an Excel sheet is pretty much going to be viewed as making a good faith effort.