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#11
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Between the juice and the withholding, if it wasn't luck, it is now. Because of the way the IRS deals with non-professional gamblers, I'd expect to see tournament entries take a nosedive. Once people find out the govt is causing 25% of the win withheld, they'll stop playing.
GG, IRS. Want to come over and squeeze my lemons even more? |
#12
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[ QUOTE ]
I still have to wonder if it would not be benefical to have the poker winnings ruled income the same as a chess player etc rather than gambling winnings. [/ QUOTE ] It's not going to happen quickly. The Tax Court ruled in Tschetschot v. Commissioner that poker tournaments are a form of gambling. While you and I may think that poker tournaments are a game of skill (and it may be that the Tax Court would agree with that), they are also a form of gambling in the mind of the IRS and the Tax Court. I think it will take legislation to change that...and that might be years away. -- Russ Fox |
#13
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Need some clarification here, say your a professional tournament player, you've made cashes worth 900k throughout the year and have had 225k withheld. But your tournament buy ins totaled 300k for the year for a 600k profit. Are we still paying 600k worth of taxes at the same rate?
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#14
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I am afraid this will also cause poker tournament players to have more audits. You can imagine that the IRS will be looking for any way to keep from cutting back a $50k+ check in refund. Once they have your money, they don't like to hand it back.
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#15
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I am afraid this will also cause poker tournament players to have more audits. You can imagine that the IRS will be looking for any way to keep from cutting back a $50k+ check in refund. Once they have your money, they don't like to hand it back. [/ QUOTE ] lol sure |
#16
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[ QUOTE ]
Need some clarification here, say your a professional tournament player, you've made cashes worth 900k throughout the year and have had 225k withheld. But your tournament buy ins totaled 300k for the year for a 600k profit. Are we still paying 600k worth of taxes at the same rate? [/ QUOTE ] The proposed reg, states that the with-holding is based on net winnings, your cash less your buy-in. The main issue seems to be one of the court cases cited as justification when a gambling pool is used. Under curent tax law a payment of over $600 is supposed to trigger a W2-G, there has been in the past an exemption for table games. This as based on the casino arguement that the amount at risk wasn't know with enough certianty to basically pass the paperwork reduction act test among others. The tax treatment for declared and accepted professional gamblers is slightly different. But in general all winnings are counted as additions to gross income. Losses are deductible up to the amount of winnings but not netted out. You have to claim losses as itemized deductions. For most people this means even slightly winning years you end up paying more tax than is really fair. Also given that previous years losses are not carried forward or backwards is another glaring problem. Currently the IRS only allowes you to net winnings and losses for a single session. You can have one big win and a bunch of loosing sessions and overall be in the negative for the year or even month but still owe taxes on in effect phantom income. D$D |
#17
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I have watched and read posts on this subject for sometime now.
The reality for business is the same for pro poker players. Small business pays taxes by the quarter. If, when I was running mine I had a great quarter, I paid taxes on it. Later, if the next two were bad, I paid less. At the year-end, taxes are then refigured on the total year, if I paid too much for that great quarter, I got it back. Same in poker. Taxes are figured and paid per tournament / quarter. At the year-end they are recalculated for the ENTIRE year, any over payment is refunded. As a note, if a business ends up in the negative that is NOT carried over to the next year you start all over again at zero. The ONLY difference is say I had OTHER income from stocks / bonds / rentals or whatever. IF my business lost money I could apply that loss to my other income. With Poker / Gambling you cannot. Fair, no; the small business model is used by many to ‘lose’ some money to offset other income. With that in mind, let me tell you, there are many ways to ‘lose’ money while actually making money. obg |
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