How will part-time players survive a regulated poker site?

[superpokermon]

[ QUOTE ]
This is the easiest and fairest tax for poker players.

[/ QUOTE ]

This seems like a good idea to me.

[SpaceSquirrel]

From Tomcruise [ QUOTE ]
Guys, get a grip, you will pay taxes on what you net, I've won lots playing live and online. I have an accountant, and all we do in april is figure out, roughly how much did i net?, ok can i roughly prove it?, fine. Then there is like one line on the tax for where i write , gambling winnings = 100k. End of story. chill out.

[/ QUOTE ]

Be careful. I'm pretty sure you can get hit pretty hard if audited. Unless you file as a professional gambler (which is often rejected by the IRS anyway), you are required to report the sum of all winning sessions (unfortunately, it's not 100% clear what constitutes a session) as gambling winnings. This amount is included in your Adjusted Gross Income (AGI). If you choose the itemize your deductions you can then include a deduction for gambling losses up to the amount of your winnings.

If you have 100k in non-gambling earnings, 100k in gambling winnings, and 80k in gambling losses, your AGI is NOT 120k ... it is 200k with an 80k deduction. These may seem like the same thing, but the higher AGI can influence eligibility for a number of other deductions, and could trigger the alternative minimum tax. You also lose the option to take the standard deduction.

Finally, if your records for losing sessions are incomplete or suspect, you may be hit with additional penalties.

Note: I am not a tax or legal expert ... just did some recent research on this issue.
I seem to have lost most of my links, but here are a few:
http://www.onlinepokerfaq.com/guide/us-taxes.html
http://www.taxabletalk.com/gambling/
http://www.casinogaming.com/features/taxlaws.html
http://www.markpilarski.com/column43-2.html

[costanza_g]

Doesnt this all come back to what the definition of a "session" is?

[roy_miami]

[ QUOTE ]
Another good reason why I am against regulated online poker. Does anyone think that any government will change its tax laws to fairly tax online poker profits?

[/ QUOTE ]

Vote Ron Paul, he wants to abolish income tax altogether.

[ericicecream]

Why do you think that regulation will CHANGE your tax reporting liability?

[TheEngineer]

[ QUOTE ]
Why do you think that regulation will CHANGE your tax reporting liability?

[/ QUOTE ]

[DeadMoneyDad]

[ QUOTE ]
Why do you think that regulation will CHANGE your tax reporting liability?

[/ QUOTE ]

It is my opinion that if we get enough pressure, say with serious WTO or other outside help, to force the issue on a poker bill we should address poker taxes at the same time rather than waiting further in the future.

IMO at least addressing the differences between Schedule C tax treatment for poker and other businesses. For example many business including passive ones like investments you can carry over losses for a few years. For tourney specialists this is a major factor.

Having a definition of sessions is of course a major problem.

But I have called the IRS a number of times to ask about what rightly triggers a pro qualification. For example say you are a college student and poker is your only income? Or what precentage of your gross income if from poker qualifies you to file pro.

In other forms of schedule C filing for example small business that can also be considered hobbies there are "triggers" that are established and recogonized by the IRS.

As it is now the IRS seems to be playing games with poker players to the effect that they want to look at each return individually to extract the maximum tax, using different justifications sometimes conflicting in different cases.

If we wait until we have a poker bill before addressing taxes on poker you are going to see polls asking "should poker players be given a tax break!"


D$D

[Tomcruise]

[ QUOTE ]
From Tomcruise [ QUOTE ]
Guys, get a grip, you will pay taxes on what you net, I've won lots playing live and online. I have an accountant, and all we do in april is figure out, roughly how much did i net?, ok can i roughly prove it?, fine. Then there is like one line on the tax for where i write , gambling winnings = 100k. End of story. chill out.

[/ QUOTE ]

Be careful. I'm pretty sure you can get hit pretty hard if audited. Unless you file as a professional gambler (which is often rejected by the IRS anyway), you are required to report the sum of all winning sessions (unfortunately, it's not 100% clear what constitutes a session) as gambling winnings. This amount is included in your Adjusted Gross Income (AGI). If you choose the itemize your deductions you can then include a deduction for gambling losses up to the amount of your winnings.

If you have 100k in non-gambling earnings, 100k in gambling winnings, and 80k in gambling losses, your AGI is NOT 120k ... it is 200k with an 80k deduction. These may seem like the same thing, but the higher AGI can influence eligibility for a number of other deductions, and could trigger the alternative minimum tax. You also lose the option to take the standard deduction.

Finally, if your records for losing sessions are incomplete or suspect, you may be hit with additional penalties.

Note: I am not a tax or legal expert ... just did some recent research on this issue.
I seem to have lost most of my links, but here are a few:
http://www.onlinepokerfaq.com/guide/us-taxes.html
http://www.taxabletalk.com/gambling/
http://www.casinogaming.com/features/taxlaws.html
http://www.markpilarski.com/column43-2.html

[/ QUOTE ]

What exactly is a winning and losing session??
Do i submit my poker tracker database and show that i have joined about 5000 different online poker tables in 2007 with 3000 winning sessions and 2000 losing sessions, and then do i report that i played 1000 tournaments and lost 200k playing them, but at the same time won 265k playing them, utterly ridiculous guys, i just give them a rough net and a rough cut of their own.....TRUST me...they don't wanna deal with someone like me for the same reason that they don't want a bunch of bullshitters showing up the IRS trying to write off tons of bogus non existent unprovable gambling losses, they just want nothing to do with it....i just need to make myself accountable for the fact that i have cash assets and other hard assets appearing up out of nowhere.

[DeadMoneyDad]

[ QUOTE ]
[ QUOTE ]
From Tomcruise [ QUOTE ]
Guys, get a grip, you will pay taxes on what you net, I've won lots playing live and online. I have an accountant, and all we do in april is figure out, roughly how much did i net?, ok can i roughly prove it?, fine. Then there is like one line on the tax for where i write , gambling winnings = 100k. End of story. chill out.

[/ QUOTE ]

Be careful. I'm pretty sure you can get hit pretty hard if audited. Unless you file as a professional gambler (which is often rejected by the IRS anyway), you are required to report the sum of all winning sessions (unfortunately, it's not 100% clear what constitutes a session) as gambling winnings. This amount is included in your Adjusted Gross Income (AGI). If you choose the itemize your deductions you can then include a deduction for gambling losses up to the amount of your winnings.

If you have 100k in non-gambling earnings, 100k in gambling winnings, and 80k in gambling losses, your AGI is NOT 120k ... it is 200k with an 80k deduction. These may seem like the same thing, but the higher AGI can influence eligibility for a number of other deductions, and could trigger the alternative minimum tax. You also lose the option to take the standard deduction.

Finally, if your records for losing sessions are incomplete or suspect, you may be hit with additional penalties.

Note: I am not a tax or legal expert ... just did some recent research on this issue.
I seem to have lost most of my links, but here are a few:
http://www.onlinepokerfaq.com/guide/us-taxes.html
http://www.taxabletalk.com/gambling/
http://www.casinogaming.com/features/taxlaws.html
http://www.markpilarski.com/column43-2.html

[/ QUOTE ]

What exactly is a winning and losing session??
Do i submit my poker tracker database and show that i have joined about 5000 different online poker tables in 2007 with 3000 winning sessions and 2000 losing sessions, and then do i report that i played 1000 tournaments and lost 200k playing them, but at the same time won 265k playing them, utterly ridiculous guys, i just give them a rough net and a rough cut of their own.....TRUST me...they don't wanna deal with someone like me for the same reason that they don't want a bunch of bullshitters showing up the IRS trying to write off tons of bogus non existent unprovable gambling losses, they just want nothing to do with it....i just need to make myself accountable for the fact that i have cash assets and other hard assets appearing up out of nowhere.

[/ QUOTE ]


The recent IRS guidance on auditing says they are looking for poker players to make an example of, at the numbers you are taking about you would be one of them.

If you are talking about almost all MTT play then you don't even have a reasonable sesson gray area to play in. Even SnG's are pretty well defined but if you can prove you played or usually play 4 or so a "sesson" then you'd have a chance IMO.

Russ Fox is a CPA that posts here on occasion, and he has some good information on his site. I can did up the link if you can't google him.


D$D

[permafrost]

[ QUOTE ]
[ QUOTE ]
Tax law would have to be rewritten to make it fair or even worth regulating, otherwise regulation might just kill the industry itself.

[/ QUOTE ]

How so? Losses are deductible at the federal level, as was explained. If your state doesn't do this, I guess you'll have to work for change at that level. Besides, these taxes are owed under the current system....the only thing regulation will change is reporting by sites.

[/ QUOTE ]

From Barney's bill:
[ QUOTE ]
Licensee...requirements with respect to any Internet bet or wager...all taxes relating to Internet gambling due to Federal and State governments...are collected at the time of any payment of any proceeds of Internet gambling

[/ QUOTE ]


After they collect taxes, sites will report; collecting and reporting will change.