TAXES!!!!!

[TheWeaz]

I have been playing for a little more that a year. I have been very $$$ successful this year. Not only individual tables but tournaments as well. My questions are 1) I won a $12,600 seat in the Party Poker Million cruise. Do I have to report that as income? 2) Does anyone else report their wins/losses for the year?

[Kurn, son of Mogh]

1) I won a $12,600 seat in the Party Poker Million cruise. Do I have to report that as income?

Depends on what country you live in. In the US, the answer is yes.

2) Does anyone else report their wins/losses for the year?

Why is what other people do relevant?

[RiverTheNuts]

Im kind of curious about this too (part 2), anyone want to give the OP a straight answer??

[Wahoo91]

[ QUOTE ]
Why is what other people do relevant?

[/ QUOTE ]

Are you implying it is not relevant? It is very relevant.

If no one else on Earth exceeded the speed limit except you, that would be considered a certain level of wrong. If everyone speeds, including you, it is a different level of wrong, and apparently acceptable (just pay the fine if you get caught).

To those who would frown at not reporting gambling income, I ask you: do you send in a fine when you speed, or jaywalk, or not come to a complete stop at a stop sign, or download music for free, or drink underage, etc? All these things are wrong and against the law.

If you commit any of these crimes and imply or state that not reporting taxes is to be abhorred then you are a hypocrite.

This is my first year of playing poker and I have yet to decide on this issue, but frown strongly at anyone who would "throw the first stone".

[Kurn, son of Mogh]

I wasn't throwing stones, I was merely suggesting that it was a decision he would have to make for himself.

[TaxGoddess]

[ QUOTE ]
Im kind of curious about this too (part 2), anyone want to give the OP a straight answer??

[/ QUOTE ]

I do pay taxes on winnings, but as an employee of the Internal Revenue Service I cannot do anything but maintain complete compliance with the United States tax laws /images/graemlins/smirk.gif

[Wahoo91]

Hi Kurn-
Sorry for the strong response above, I was just done reading another post somewhere that implied that if you do not report these taxes you are a "bad person" to paraphrase.

I think that people who pick one issue to decide there is a black/white answer have not examined their own life closely enough.

Anyway, I do know that if I knew that 98% of 2+2s reported gambling winnings on thier taxes that would indicate clearly what I should do. If 98% did not report gambling winnings on thier taxes that would as well indicate what I would be inclined to do. If it were 50/50% well that would be an interesting question.

I have just started looking at this but have not really gotten a good guage at what percentage report vs. not report. Kurn, as a very experienced poster here what would you guess the reporting rate would be?

[cardcounter0]

Yeah, all those million dollar winning poker tournaments and those guys pulling down 100-200k a year at poker, in fact, the whole multi-billion dollar gambling industry --- Naw, nobody pays any taxes on that. Who would even notice?
/images/graemlins/tongue.gif

[Kurn, son of Mogh]

I don't think 98% don't report, but I'd be surprised if more than 1/3 actually do.

But that's just a wild guess.

[helpmeout]

If you report any profits from gambling as income can you then claim any yearly losses as a deduction?

I wouldn't be declaring it as income until I was making $100k+ a year or at least a solid income over a period of a few years.

[Franko_Fara]

If your in the european union you don't have to pay taxes on on-line poker income. This has been ruled by the EU-court.

[js13_tps]

So, if you report winnings, what can you report losses & expenses?

i.e. the example above. Travel to and from said event? Meals? Lodging? Whatever isn't included. I seem to remember Moneymaker having to scrounge up enough money to get to Vegas and stay for the duration of the WSOP tournament. Are books training material? Purchase of poker tracker? All entry fee's from tournaments during the year, not just the one you won?

Do lottery tickets count as losses if you didn't win? Whats to keep someone from picking up old tickets laying around that didn't win and count them as losses?

[Kurn, son of Mogh]

If you report any profits from gambling as income can you then claim any yearly losses as a deduction?

The way the IRS requires you to report it is all winnings (not profit) is reported as *other income* on Form 1040, and all losses (not to exceed winnings) are reported as deductions on schedule A. IRS publication 529 expressly forbids reporting the net of wins and losses as income.

I wouldn't be declaring it as income until I was making $100k+ a year or at least a solid income over a period of a few years.

That's your choice, but what you just stated amounts to admitting you'll be breaking the law, so like any decision, evaluate you chances of success vs. the downside if you're caught (at best heavy interest and penalties on the unreported income.)

[Wahoo91]

I wouldn't be declaring it as income until I was making $100k+ a year or at least a solid income over a period of a few years.

That's your choice, but what you just stated amounts to admitting you'll be breaking the law, so like any decision, evaluate you chances of success vs. the downside if you're caught (at best heavy interest and penalties on the unreported income.)

In order to determine the "pot odds" of this choice does anyone know what exactly are the monetary penalties involved if caught?