#11
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Re: Incorporating yourself as a Professional Gambler:
Krishan,
Great information, much appreciated. The counter-argument would be that I work as more like an investor and trader. I am supplying capital to make trades as well as executing them. It’s standard in this industry for backers/stakers/investors to put up all the capital for professional players to play in exchange for 66% of the total profits (and eating all the losses if they do incur). So it would make sense for me to be only paid, "25-33%" of my winnings. This is quite different from a professional athlete who is merely paid a salary and can’t lose money. |
#12
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Re: Incorporating yourself as a Professional Gambler:
are you sure you want to be a professional gambler. you probably make money at other things as well. and can be a professional at them.
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#13
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Re: Incorporating yourself as a Professional Gambler:
I was thinking about doing this next year when I have to start paying taxes on my gambling income, but im pretty sure in Canada you wouldnt incorporate yourself but start a business for yourself. Pretty sure they are different, and since you will never have any liabilities I dont see the advantage of a limited liability setup (aka a corp.)
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#14
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Re: Incorporating yourself as a Professional Gambler:
[ QUOTE ]
Krishan, Great information, much appreciated. The counter-argument would be that I work as more like an investor and trader. I am supplying capital to make trades as well as executing them. It’s standard in this industry for backers/stakers/investors to put up all the capital for professional players to play in exchange for 66% of the total profits (and eating all the losses if they do incur). So it would make sense for me to be only paid, "25-33%" of my winnings. This is quite different from a professional athlete who is merely paid a salary and can’t lose money. [/ QUOTE ] Heh. I thought those thought but from another line. I wanted to shelter the bankroll portion of my winnings. Because it's capital tied up in the business, and without it I wouldn't have a business, wouldn't it make sense for me to only pay taxes on winnings excluding a reasonable bankroll? Unfortunately, the IRS doesn't look at it this way. And it's the IRS that makes the rules. I must point out that in the situation you describe, the backer would presumably pay taxes on the 66% of winnings. Since you are essentially your own backer wouldn't you still be responsible for the whole thing? Krishan |
#15
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Re: Incorporating yourself as a Professional Gambler:
krishan,
Any of this change if I incorporate offshore and hold my accounts there? I get the feeling this approaches an illegal tax shelter though. I really want to truly expatriate myself more and more every day [img]/images/graemlins/frown.gif[/img] |
#16
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Re: Incorporating yourself as a Professional Gambler:
I looked into this the other day. For IRS purposes I heard the phrase "disregarded entity" and everything passes through onto your Schedule C, so it really isn't that great. :/
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#17
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Re: Incorporating yourself as a Professional Gambler:
I talked to my CPA and he said basically the lady who wrote the book is wrong. He went on to say if I make 400k this year, 300k of that would be corporate profit and the other 100k would be my "salary", upon which I'd have to pay self-employment tax on. (Saving me 12,000 which I will be giving to charity instead of uncle sam)
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#18
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Re: Incorporating yourself as a Professional Gambler:
you only pay self employment tax on 100k anyway. so it saves u nothing.
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#19
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Re: Incorporating yourself as a Professional Gambler:
[ QUOTE ]
are you sure you want to be a professional gambler. you probably make money at other things as well. and can be a professional at them. [/ QUOTE ] Ray, I have lots of expenses I like to deduct that I incur from traveling/playing the tournament circuit. If I don’t file as a professional I can’t deduct these. Now whether or not I actually want to be a professional gambler is a much more interesting and complicated question. |
#20
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Re: Incorporating yourself as a Professional Gambler:
actually I forgot you pay the medicare on all the money. so you save like a few $ on the 300k
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