Is rakeback income?

[Sniper]

[ QUOTE ]
When you receive a rebate on a purchase like a vehicle, you reduce your basis by the amount of the rebate. If you buy a new car for $10,000 and receive a rebate of $500, your basis is $9,500. It is the basis from which you calculate gain/loss should you sell the car or need to figure depreciation if you use it for your business. So you're not counting the rebate as income, thus you're not paying tax on it. So goodgrief is right.

IRS Publication 525 states that "if the refund or other recovery and the expense occur in the same year, the recovery reduces the deduction or credit and is not reported as income." That is similar to reducing the basis as described above.

When you file, you can deduct your gambling losses to the extent of your gambling winnings. (These are two separate numbers. This is not one net number.) So, the rake you get back reduces the basis of your winnings. Subtract the rake from your winnings and procede. (Claw eyeballs out at this step if necessary.)

[/ QUOTE ]

Uggh... No

It must be accounted for either by Increasing your Income or Reducing your deduction... and since you don't count rake as an deduction, but rather as a reduction to income, rakeback increases income.

There is probably another school of thought that would say that Rakeback is a Marketing/contractor payment, unrelated (sorta) to your wagering... and in that case it clearly is income, as well. (and you probably should get a 1099 from your affiliate)

[DING-DONG YO]

Sniper is correct. Rakeback is income. Lawl that there is even a debate.

[KEW]

WPX is the clearest example of why RB is income..

Rake is a deduction from your income..Rake is netted into the money won..

If RB was not income I would want WPX to take much more money out of my pot and then give it back later..Thus my winning would be that much less or even negative...In an extreme example I could lose 20K on WPX get it all back in RB then NET a WPX 20K loss against my Stars and FTP profits..

If RB was not income it would be the same as a resteraunt getting a refund from there meat supplier at the end of the month but still being able to expense the full amount of the meat expense and make no adjustment for the "refund" recieved at the end of the month...

I hope the WPX example makes it clear why RB is taxable as income and there really is no debate..

UGLYOWL has has an interesting question...I have always treated my RB as seperate item the netted with winnings to come up with total income from poker(I file sch C so I do not need to net winning and losing sessions)...

[The Worm]

[ QUOTE ]
Sniper is correct. Rakeback is income. Lawl that there is even a debate.

[/ QUOTE ]

Lawl? Why? I think its a very valid question. I obv am going to claim it now, but I think there is some validity in beliving you wouldnt have too.

What is rake? Its a fee you pay the site to play there. What is rakeback? A portion of the fee returned to you as incentive to play there. I didnt win that money in a hand. I didnt win it in a tourney. I paid it in rake at cash games, and tourney fees. I happen to receive some of these fees back as an incentive. Its not profit and its not loss. I think its a very valid question, go lawl at something else.

[KEW]

[ QUOTE ]
When you receive a rebate on a purchase like a vehicle, you reduce your basis by the amount of the rebate. If you buy a new car for $10,000 and receive a rebate of $500, your basis is $9,500. It is the basis from which you calculate gain/loss should you sell the car or need to figure depreciation if you use it for your business. So you're not counting the rebate as income, thus you're not paying tax on it. So goodgrief is right.

IRS Publication 525 states that "if the refund or other recovery and the expense occur in the same year, the recovery reduces the deduction or credit and is not reported as income." That is similar to reducing the basis as described above.

When you file, you can deduct your gambling losses to the extent of your gambling winnings. (These are two separate numbers. This is not one net number.) So, the rake you get back reduces the basis of your winnings. Subtract the rake from your winnings and procede. (Claw eyeballs out at this step if necessary.)

[/ QUOTE ]

Poker income is not an asset..

[MoolahMuerte]

here is another thread (i think helpful) on this:

http://forumserver.twoplustwo.com/showfl...rue#Post9153958

PS:look at the thread - not pushing my opinion

[Kegs]

Consider though that the rakeback isn't always paid back from the poker site to you. It may be paid to an affiliate and they pay you. In that respect it could be a third party incentive program which could be taxable when paid more than $600 per year from a single source. This is just a thought for consideration as I have no professional knowledge.

[Sniper]

Moolah,

If you searched some more, you would find many other threads... and the answer is always the same... Rakeback = Income.

[DING-DONG YO]

[ QUOTE ]
[ QUOTE ]
Sniper is correct. Rakeback is income. Lawl that there is even a debate.

[/ QUOTE ]

Lawl? Why? I think its a very valid question. I obv am going to claim it now, but I think there is some validity in beliving you wouldnt have too.

What is rake? Its a fee you pay the site to play there. What is rakeback? A portion of the fee returned to you as incentive to play there. I didnt win that money in a hand. I didnt win it in a tourney. I paid it in rake at cash games, and tourney fees. I happen to receive some of these fees back as an incentive. Its not profit and its not loss. I think its a very valid question, go lawl at something else.

[/ QUOTE ]

sorry man, not trying to be an ass.

Think of it this way. If you're a business, you pay taxes on your net income (little more complex than that, but simply put that is true). Rakeback would be a source of income and would therefore increase your net income, all of which is taxable.

Hope that helps.

[2easy]

if you didnt get rakeback your income would be x.

if you do get rakeback your income is x + rakeback.

it is income and taxable.