Quick Tax poll (not whether or not you're paying)

[SomethingClever]

How are you reporting?

[MrWookie47]

Option #2 screws me less, and I think I can make a pretty good case that it counts as a single session.

[excession]

neither - UK player so no tax..

I think #2 would have to be appropriate. Reporting on a session by session basis would be really cumbersome and unrealistic (I'm sure day traders don't report income every time they sell a stock at profit).

[teddyFBI]

please explain to a stupid person why it even matters...isn't your net at the end of the year the same?

[TStoneMBD]

you add up wins as income and deduct losses as expenses so if your net income is 100k you end up getting put in a 300k bracket for example. if you claimed every session as each table sitting and won 100k for the year, youd probably end up in a millionaire bracket.

btw im filing by 24 hour period.

[SomethingClever]

This isn't quite true.

Your taxable income should be the same, regardless of how you define your sessions. And your tax rate is determined by your taxable income. You won't be in the millionaire bracket if you make $1,000,000 and lose $900,000 for example.

The problem with reporting each table's wins and losses is that it results in a hyper-inflated AGI (adjusted gross income), which can affect Roth IRA eligibility, student loans, etc...

[BigBiceps]

[ QUOTE ]
I think #2 would have to be appropriate. Reporting on a session by session basis would be really cumbersome and unrealistic (I'm sure day traders don't report income every time they sell a stock at profit).

[/ QUOTE ]

yes, they do

[BigBiceps]

[ QUOTE ]
please explain to a stupid person why it even matters...isn't your net at the end of the year the same?

[/ QUOTE ]

due to phaseout of itemized deductions at higher adjusted gross income and also the alternative minimum tax.

[RikaKazak]

365 days to me

[RikaKazak]

well,
I used to be a day trader, and yes, it is by EVERY stock buy and sell, sometimes that means 20 transactions in a single day.

[SomethingClever]

[ QUOTE ]
365 days to me

[/ QUOTE ]

I've been warned against this for several reasons.

Of course, it would make the most sense.... to just report the amount you actually won and pay taxes on it.

If only the IRS saw it that way.

[RikaKazak]

seriously man, no way the IRS can tell how much you play and when, I'm making it just 1 payment and saying I just got "lucky" That way I claim "gambling" and not self employment. ALSO, if you need to be claimed for self employment for say a home loan, just get a letter from a CPA (easily obtained for $100) that says you've been self employed for 2 years.

[DarkKnight]

[ QUOTE ]
I think #2 would have to be appropriate. Reporting on a session by session basis would be really cumbersome and unrealistic (I'm sure day traders don't report income every time they sell a stock at profit).

[/ QUOTE ]

Actually they do

[TheMetetron]

Neither, professional, so I lump it.

[TStoneMBD]

hi, wrong. the irs can ask you to give them your party poker password and when you do, they can login to your account and check the status of all your poker activity. if you havent yet noticed, party tracks every dollar that you take from each table to the next.

[teddyFBI]

[ QUOTE ]
hi, wrong. the irs can ask you to give them your party poker password and when you do, they can login to your account and check the status of all your poker activity. if you havent yet noticed, party tracks every dollar that you take from each table to the next.

[/ QUOTE ]

Cite your source for this.

[TStoneMBD]

well my source for the irs being able to ask for your party password actually came from a low count poster from the the internet gambling forums. of course he could have lied.

he said that his friend was audited by the irs and that they asked for his party poker password. he refused to give it to them and was penalized for it. he may have been lying but it seems extremely reasonable for the irs to ask you for your password. why wouldnt they?

if you dont know about party tracking every dollar you take from each table you can check your own stats on this.

go into party. click my account -> go to my account website. once youre there click view the activity of your account.

[TeeJayORTj]

Note: Your Account Activity information would be available only for a period of 30 days from the date you last logged in. You can view 3 days of account activity information at a time.


Thats what it says on the bottom of the page. Go try to get account activity for October...you can't.

[TStoneMBD]

oh ok. my bad, i didnt realize that. thanks for clarifying.

[teddyFBI]

yes, i remember that low-count poster.

Not a chance in hell the IRS could force you to disclose your password.

They could probably subpoena your account activity from Party...whether Party would have any responsibility to comply is unclear -- whether they could require YOU to supply them with your account activity I don't know.

You want to hide that money? Go register for a bunch of high buy-in tournies in late December. Unregister later.

[TStoneMBD]

why would they not be allowed to have you disclose your password? cite your sources.

[teddyFBI]

That's simply not how the laws of this country work -- only a court could compel that kind of disclosure.

[Voltron87]

[ QUOTE ]
You want to hide that money? Go register for a bunch of high buy-in tournies in late December. Unregister later.

[/ QUOTE ]

i dont see how this would hide money, it will just move tax obligations from one quarter to another. which is pretty much identical to a lot of enrons tactics... that thought actually has a lot of paralells to poker now that i think about it. plus it pretty much categorically makes it a bad idea.


tstonembd, no offense, but you seem kind of slow. you should probably not act so authoritative on tax issues for everyones benefit/ease of not having to refute youre dumb ideas.

[TStoneMBD]

youre the first person on my ignore list. literally.

[teddyFBI]

for the record, i wasn't advocating that tourney strategy -- it's pretty stupid.

[Voltron87]

[ QUOTE ]
for the record, i wasn't advocating that tourney strategy -- it's pretty stupid.

[/ QUOTE ]

yeah i know. i wasnt seriously evaluating it either.

[RikaKazak]

Tsone, OBVIOUSLY you have no idea what you are talking about, aka, you were wrong on the last thing you posted, so please don't post thins acting like you know what's going on, cause you don't.

ALSO,
how can pp even know how much I play, cause A.) I play under another name for "bonus" purposes. B.) How would they even know what site I played on, if they asked, there's a million responses I could give. c.) ALSO if I claim luck, name one "fish" that writes down how much he makes per day, I thought the fact that they didn't do things like that was what made them fish.

[HajiShirazu]

My definition of a session is that it begins when you buy chips (deposit) from an online poker site and ends when you cash those chips out (in the case of online to neteller or a bank account), just as I believe it does with live poker.
Also, I have absolutely no records of session by session play but I do want to be legitimate and pay taxes even if I only made like 10 or 15k, so bank and neteller records is all I have to go on.

[Niediam]

The IRS can't 'force' you to give your Party password nomatter what but they can easily get a court order requiring you to give it to them and if you don't it's prison time.

[Niediam]

[ QUOTE ]
My definition of a session is that it begins when you buy chips (deposit) from an online poker site and ends when you cash those chips out (in the case of online to neteller or a bank account), just as I believe it does with live poker.
Also, I have absolutely no records of session by session play but I do want to be legitimate and pay taxes even if I only made like 10 or 15k, so bank and neteller records is all I have to go on.

[/ QUOTE ]

The IRS has ruled that such things as taking a long lunch break or switching from Hold'em to Omaha can trigger a new session with B&M play. I don't think your 'until I cash in the chips' plan is legal. Of course I really can't see any way for them to find out...

[RikaKazak]

well if we have to report by day, who the heck keeps those records? You think they're going to fine you thousands of dollars cause you don't keep tracker "per day."

According to pokertracker I have 2,049 sessions the past 3 months, so times that by 4 and i'm suppose to write out 8,000 sessions, YEAH FREAKING RIGHT!

I'm paying according to neteller withdraws. Otherwise my tax return would be MONSTEROUS! I'm paying on 100% of what I make, I can't see how they can be too upset.

[Niediam]

[ QUOTE ]
well if we have to report by day, who the heck keeps those records? You think they're going to fine you thousands of dollars cause you don't keep tracker "per day."

[/ QUOTE ]

I think its very possible. I think it's even possible (yet not anywhere near as likely) that you could have issues by keeping your records 'by day' as opposed to by table or something else more specific.

[ QUOTE ]
According to pokertracker I have 2,049 sessions the past 3 months, so times that by 4 and i'm suppose to write out 8,000 sessions, YEAH FREAKING RIGHT!

[/ QUOTE ]

I believe you are technically supposed to keep track of the sessions immediately after they occur as opposed to trying to figure it all out at the end of the year. /images/graemlins/smile.gif But if you use PokerTracker you can just export your sessions (please note that what PT considers a session doesn't mean that's what the IRS considers one - but I'm sure its fine as it goes by a per table basis) to Excell and have a nice spread sheet printed out.

[ QUOTE ]
I'm paying according to neteller withdraws. Otherwise my tax return would be MONSTEROUS! I'm paying on 100% of what I make, I can't see how they can be too upset.

[/ QUOTE ]

That's why the law sucks. /images/graemlins/smile.gif

They will be upset because your AGI will be off and for most people during it your way will lower their tax burden. If you get caught the best case scenario is probably that you have to pay what you would have owed with interest. Worst case scenario is that they send you away for a few years (definatly very unlikey). Most likely they will want the money that you should have paid plus interest and fine you some amount in the thousands of dollars. None of this really matters if you never get audited but I'm going to guess that having a significant amount of gambling income, especially if it's reoccuring every year, increases the chance of said audit.

[MisterNatural]

After reading The Gambler's Guide to Taxes by Lewis I made a spreadsheet to track my play per session. A session for me is from the moment I open the first table to the moment I close the last one. I rotate tables keeping 4 open most of the time for anywhere from 10 minutes to 2 hours or so. I feel confident that this will be acceptable by the IRS, based on accounts in the book about previous rulings.

According to the book there are no hard fast rules on how to keep your records for internet play. For brink and mortar play the standard is that you should be reporting each table you play at. I think it could be a potential problem to try to report by year, neteller withdrawals, or even by site (deposit to withdrawal).

[Sniper]

[ QUOTE ]
(I'm sure day traders don't report income every time they sell a stock at profit).


[/ QUOTE ]

Why would you say this?

Day Traders report all transactions!