My new CPA says I should file as a corporation???

[SgtJake]

Russ,

Honored that you've posted in my thread. "Mastering no limit" was the first poker book I read and the one that helped me the most. Several of my friends have purchased the book on my recommendation.

Back on topic....what is the recommended way to file if your only source of income is from poker? (link?)

[Russ Fox]

Thank you for the kind remarks about Mastering No-Limit Hold'em.

[ QUOTE ]
Back on topic....what is the recommended way to file if your only source of income is from poker? (link?)

[/ QUOTE ]

Unfortunately, your question isn't easy to answer. Tax is not a one-size-fits-all profession. It sounds like you're a professional ("all income from poker"), which indicates a Schedule C. But that's not always the case.

The Groetzinger decision governs whether or not you should file as a professional. However, other issues such as your state of residence, whether you gamble online or in casinos, whether you're a full-time student, other businesses, other sources of income, etc. can and do impact how you should file. A professional tax preparer should ask the questions needed to determine what's right for your situation.

It's impossible for me to post an answer to your question. I don't know you, and the full facts of your situation. And without that, I'd just be guessing.

-- Russ Fox

[Legislurker]

The whole point of filing in an OFC is that the corporation pays YOU and buys your house and car. The IRS can't force you to divulge the nature of the corporation or even who owns it.
Especially if the money never comes into the US. Im not saying its "legal" its just a lot of effort on their part to prove illegality that they may totally avoid. Getting the information would take a LOT of time and expense, so as long as you cna account for how you got all yoru assets, or show that the corporation owns it, youre pretty safe, but i wouldnt say ironclad.

[Russ Fox]

[ QUOTE ]
The IRS can't force you to divulge the nature of the corporation or even who owns it

[/ QUOTE ]

S Corporation tax returns contain Schedule K-1s that disclose the full ownership of the corporation.

C Corporation tax returns include details of all 50% (or more) owners and all foreign owners. They also list all directors (including their social security numbers).

-- Russ Fox

[DeadMoneyDad]

[ QUOTE ]
other sources of income, etc. can and do impact how you should file. A professional tax preparer should ask the questions needed to determine what's right for your situation.

[/ QUOTE ]

I understand your general reluctance to give tax advice both for free and with out a full understanding of all the facts at issue. You are a professional.

But on one point of "other income" does much depends on the active vs passive nature of the "other income"? In all other regards I feel farily comfortable, but the nature of this source of income compared with the amount of reportable "active on-line (majority) and active live (minority) poker income" vs passive income is the heart of my question.

I couldn't get a straight answer from repeated tries from the IRS.



D$D

[Russ Fox]

[ QUOTE ]
But on one point of "other income" does much depends on the active vs passive nature of the "other income"? In all other regards I feel farily comfortable, but the nature of this source of income compared with the amount of reportable "active on-line (majority) and active live (minority) poker income" vs passive income is the heart of my question.

[/ QUOTE ]

I'm not sure what you're trying to ask.

If you're talking about "passive income," that's typically things like real estate rentals, and is normally shown on Schedule E.

Gambling income shown as other income (line 21) isn't passive income.

[DeadMoneyDad]

[ QUOTE ]
[ QUOTE ]
But on one point of "other income" does much depends on the active vs passive nature of the "other income"? In all other regards I feel farily comfortable, but the nature of this source of income compared with the amount of reportable "active on-line (majority) and active live (minority) poker income" vs passive income is the heart of my question.

[/ QUOTE ]

I'm not sure what you're trying to ask.

If you're talking about "passive income," that's typically things like real estate rentals, and is normally shown on Schedule E.

Gambling income shown as other income (line 21) isn't passive income.

[/ QUOTE ]

Say for '07 all of my non-poker income was passive, would the fact that all my active income change how the IRS determined my need to file as a pro? Yes I am a winning player. Personally I do not think the amount of winnings makes it reasonable, but I could not get the IRS to give me any idea even in the most broad terms of dollar amounts what is the threshold, if there is any.

I would call my poker playing a hobby, as I've spent almost all of '07 having to settle my mothers Estate, but as the Executor, I have much bigger problems with the IRS and bigger exposure. I'm willing to pay the SE taxes, but the poker income is almost insiginifant IMO.

So I am the reverse of the usual case I don't want to file as a pro, given that I play almost exclusively on-line there are no major deductions for me to try and write off. I do use my office for other things, so even a home office deduction helps me little.

I just don't want to have to pay a higher tax because some jerk at the IRS thinks they can get a little more out of me. I have no problem with the tax, it is the penalties and intrest that drive me nuts.



D$D

[Russ Fox]

[ QUOTE ]
Say for '07 all of my non-poker income was passive, would the fact that all my active income change how the IRS determined my need to file as a pro? Yes I am a winning player. Personally I do not think the amount of winnings makes it reasonable, but I could not get the IRS to give me any idea even in the most broad terms of dollar amounts what is the threshold, if there is any.

[/ QUOTE ]

The rule is that if you are gambling "full time" and "for your livelihood," you are a professional. Without knowing the full facts of your situation--reviewing your numbers--I can't tell you whether or not you should file as a professional.

-- Russ Fox

[chesterboy]

Hey Russ if I have sizeable income from poker (60k+) but I am a full time student, do I still have to do the self employed thing?

[DeadMoneyDad]

[ QUOTE ]
[ QUOTE ]
Say for '07 all of my non-poker income was passive, would the fact that all my active income change how the IRS determined my need to file as a pro? Yes I am a winning player. Personally I do not think the amount of winnings makes it reasonable, but I could not get the IRS to give me any idea even in the most broad terms of dollar amounts what is the threshold, if there is any.

[/ QUOTE ]

The rule is that if you are gambling "full time" and "for your livelihood," you are a professional. Without knowing the full facts of your situation--reviewing your numbers--I can't tell you whether or not you should file as a professional.

-- Russ Fox

[/ QUOTE ]

Well for '07 so far it is my only "active" income, even paying the SE bite is pretty minimal.

What is or can you direct me to any info on deductibility of educational and industry related materials, along the lines of say Union, or for example as a broker I used to be able to deduct "continuing educational" expenses, as well as most all publications involving my "profession"?

I guess for fun I could file a quarterly estimated payment now and not have to await 4/15, well the extension date (I'm one of those) to see where I stand on this issue. That might allow me to get a "ruling" now and not complicate other issues.

Or not?


D$D