Proposed book profiling big online winners

[sawseech]

Interest takes the form of late-payment penalties, and those penalties are abusive (imagine a really bad credit card, and then double it).

Quarterly payments require two years of history to make a reasonable calculation, and if you are climbing stakes, it further cripples your earning potential and so constitutes an opportunity cost. Imagine setting aside half your winnings every 3 months, and also having to live. It's a joke, and is usually reserved for deliquent filers with history.

The present taxcode treats OPPs as it does contract workers or real estate representatives; it assumes that a poker player can operate without loss for extended periods, and that winnings which put the player in the black are as windfall - hence, no carryover of losses. This is flawed.

However, the fed cannot rewrite the code to resemble present capital gains law (the most reasonable approach) as it would generate masses of work and paper at a net loss to the taxpayer. Imagine everyone in vegas having to get a receipt for their net position at the end of every session, for every game. Imagine the IRS having to sort through it all. Imagine the complaints and the backlog in the courts.

Gambling would no longer be fun and people would go underground for their fix.

[El Diablo]

Rek: "Also, what if you logged all your session to session results and in year 2006 you earned 1 million dollars (but only cashed out 100k). Then on January 1st, 2007 you decided to take a shot at the biggest games online and lost your 900k. Then what?" You owe taxes on a million. A chunk of the money you gambled with wasn't yours, it belonged to the IRS. That's why a lot of people in this situation pay taxes quarterly.

spino: You said that Stars account info is safe from IRS prying eyes. That's what people said about Neteller too. I'd expect Stars to cave to US government pressure at some point since they can pretty much shut them down if they want.

saw: "Imagine setting aside half your winnings every 3 months, and also having to live." Uh, hmmm, that's what pretty much everyone with a normal job does, except their employer does it for them every two weeks.

[iRock]

I have had a lot of meetings with cpas. the pros/cons to filing as a professional gambler really work down to expenses. as a professional gambler, you are treated as a sole proprietor (some who owns their own business for those ot sweet enough to take intro to finance) for the purposes of social security. when you work for a company, they deduct ot half of the social security payment you owe the govt and then match it to help youwith the ful payment. as a sole proprietor, you are responsible for both sides. this amounts to 15% of the first 90k you make a year in addition to the income tax on that 90k. you can, however, deduct your expenses (travel, computer, meals, internet connection, etc.) from your net income. if this saves you moe than the 13k you are responsible for for social security, then you should file as aprofessional gambler. I was also told you can carry over losses for up to an x amount of years as a professional gambler..can anyone confirm or deny this last part?