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#21
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[ QUOTE ] Comps would be part of the gross winnings. If gross losses are greater, then there is no taxable gambling income. [/ QUOTE ] Only a professional gambler can offset losses against winnings and only declare the net. The rest of us are legally required to declare 100% of the winnings, and can then take losses as a Schedule A deduction. No clue where comps fall. But honest and straightarrow as I am about taxes, I completely ignore comps. I've seen many things saying they ARE taxable. It's good to hear the IRS is losing challenges to that. Now I feel better about ignoring 'em. [/ QUOTE ] To be clear, I am not a CPA and what follows is what I have gleaned from Walter Lewis's book: The IRS is trying to say that comps should be declared as regular income and not offset by gambling losses. In the cases the IRS has lost, the ruling was that comps should be considered as gambling income and thus can be offset by gambling losses. If you are a winning player then technically comps should be declared and taxed... What I think TT is getting at about airline frequent flyer miles is that the IRS would be taking a very unpopular position if they considered trying to tax them - even though the letter of the law requires it. Similarly the IRS would be taking a very unpopular position if they tried to enforce taxation on most minor casino comps that are essentially compensating players for food and board. And I would speculate that the time and energy they would spend on this would not be worth the meager return. The specific case that Walter Lewis cites, involves a major whale who was receiving Rolls Royces and other extremely expensive luxury items. |
#22
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Thanks for some great answers so far to what appears to be quite a complex issue.
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