For anybody that just doesn't understand paying taxes on poker winning

[dogmeat]

Here is an intersting (although long winded) article on paying taxes from poker winnings. The author mentions how you might owe taxes in one year, and have no deduction for it if you win a satellite in say 2004, but it is for a tournament in 2005.

http://www.pokernews.info/news/2005/04/poker-and-the-law-one.htm

Dogmeat /images/graemlins/spade.gif

[Lottery Larry]

I read that one, it is a good one. I'm not sure that he is correct about deducting the buy-in amount from the prize you win and reporting that one figure as income.

Based on my conversation with the IRS a few weeks ago, I think you report the total prize as income and the entry fee as a cost. But he didn't make very clear that even though he was an attorney that people should talk to a pro in their state.

[BeerGolfPoker]

Thanks, dogmeat, this is very useful info.

[broiler]

Based on the thread that was going a few weeks ago, I would have to say that his article is not very good.

The winnings should not be reported net of cost since if it was reported to the IRS, it would be reported as the gross win. The entry fee would be negative other income, not to be confused with an itemized deduction.

Your conversation with the IRS means that his crossing year satellite point is wrong. The tournament entry has no value until you attend the tournament and play. The point I made in your thread a few weeks back was the same as the IRS answer that a nontransferable entry has no value until you play or have the ability to receive value.

He answers the question without giving an example from personal experience, which leads me to believe that he is a poker player who happens to be an attorney. I hate when sites put up articles by people who disclaim their opinion with an "ask somebody else" statement. Either he has dealt with the situation and knows the answer or he doesn't. I would choose the latter.