So you just won $50,000, now what do you do?

[richie]

Hypothetical question, but a situation that could definitely occur. You have just won $50,000 in an online tournament. Or, perhaps you were playing at a casino and won a giant jackpot. Anyway, being a US citizen, you are somewhat concerned about how to receive this money. You are not only concerned about the tax liability, but also the legality issue surrounding online gambling. It's only February, do you slowly bleed the money into your bank account (hoping no one notices /images/graemlins/tongue.gif), do you get one big money transfer (sending red flags everywhere!??)and not worry about it till next year--what do you do? Would you trust a gaming site to hold onto your money for a long period of time? IS Neteller trustworthy enough to transfer a large amount of money into? I only play 2/4 stakes so I rarely have enough money anywhere to ever worry about these types of situations. However, I was playing a casino site the other day and almost hit a big jackpot. /images/graemlins/frown.gif It got me thinking, though, how would you handle a situation like this, how would you receive a huge sum of money like this?
Seems like it could be troublesome.

[astroglide]

withdraw it in sub-10k increments just to avoid flags. pay the taxes. not a problem. if it were, we'd be reading letters written by moneymaker from his prison cell.

[CrackerZack]

Ask rushmore. He lives in connecticut and won 150K

[DrSavage]

I would transfer it into my bank account and pay taxes on it.
I also strongly advice against bleeding it in small amounts, these things are watched closely now with anti money laundering laws.

[skaboomizzy]

Right on, DrSavage. Just get into your bank, pay your taxes and everything is fine.

[HavanaBanana]

Move to England.

[William]

Just contact me, and for a small fee, I'll get you your money.
That easy! /images/graemlins/smirk.gif

[Simon Diamond]

Move to England.

It would need to be a hell of a lot more than $50k to make that a +EV decision.

Simon

[HavanaBanana]

[ QUOTE ]
Just contact me, and for a small fee, I'll get you your money.
That easy!

[/ QUOTE ]

I don't know if you are very trustworthy William.....

[TheGrifter]

[William]

I don't know if you are very trustworthy William

True, only those who deserve it can count on me. The rest gets back whatever they in first place give

[LondonBroil]

[ QUOTE ]
It got me thinking, though, how would you handle a situation like this, how would you receive a huge sum of money like this? Seems like it could be troublesome.


[/ QUOTE ]

Let me tell you, I wake up in a cold sweat every night thinking how troublesome it would be to win $50,000.

[richie]

That's my initial feelings. However, didn't some guy in Minnesota or N. Dakota get busted for gambling on the internet? Somebody posted a thread about this guy several months back. He paid his taxes and got screwed for being honest. /images/graemlins/mad.gif

[William]

Better stop all that internet gambling buddy, you're getting way too nervous. And BTW, stop posting here as well, they might already be tracing you... /images/graemlins/grin.gif

[richie]

You're right, there's a knock at my door as we speak.... /images/graemlins/grin.gif

[DrSavage]

Not sure about that guy in minnesota, but my relative works in a bank in anti money laundering group and he told me that the people that are getting the most attention are the ones that put under 10k into account every month. Days when you just had to worry about IRS are gone, with the Patriot Act they're watching everybody.

[William]

Days when you just had to worry about IRS are gone, with the Patriot Act they're watching everybody.


Hmmm... you guys will soon be considering defecting to Russia, the new free world... /images/graemlins/grin.gif

[DrSavage]

[ QUOTE ]

Hmmm... you guys will soon be considering defecting to Russia, the new free world...

[/ QUOTE ]
I'm from there dummy /images/graemlins/smile.gif
Really considering it though, you wouldn't beleive how much America now resembles Soviet Union in the 80s ...

[fluff]

[ QUOTE ]
[ QUOTE ]

Hmmm... you guys will soon be considering defecting to Russia, the new free world...

[/ QUOTE ]
I'm from there dummy /images/graemlins/smile.gif
Really considering it though, you wouldn't beleive how much America now resembles Soviet Union in the 80s ...

[/ QUOTE ]

Now there is a scary comparison...

Anyone know about gambling/taxation law in Canada? /images/graemlins/grin.gif

[thwang99]

If you really don't want the $50,000, just go onto the biggest games on the site, NL games, maybe, and raise and raise away to your heart's content.

Though, sometimes you'll majorly suckout on someone's AA, putting them on HUGE tilt, with a "how the heck do you go all-in with 27o?" comments. /images/graemlins/wink.gif

Anyways, no advice for you, I never won that much, but just pay taxes, don't worry about it being illegal, the IRS doesn't care about that.
- Tony

[dogsballs]

It would need to be a hell of a lot more than $50k to make that a +EV decision.


Lol, now that is funny! /images/graemlins/grin.gif /images/graemlins/grin.gif

[Hotchile]

Sure, they tax the crap out of us on everything else but there's no gambling tax or patriot act. Damn, I'm proud to be Canadian /images/graemlins/tongue.gif

[mosch]

You nab it all at once, pay the taxes on it, and go about your business.

The IRS doesn't give a flying hoot about the legality of online gambling, so long as they get their rake. Getting caught buring transactions on the other hand... they care about that deeply.

[Simon Diamond]

Lol, now that is funny!

Funny for you, a harsh reality for me!

Simon

[MadSci]

If you are really "worried" you could think ahead and establish poker accounts from banks in countries with better laws. I understand Austria has anonymous bank accounts.

The U.S. has some of the worst and most intrusive banking laws anywhere. I think the reason is that, whereas the citizens of other countries are only taxed on what they make there, United Statesians are taxed for whatever they do anywhere. Hence, our laws allow us to be hunted around the world, and our government bullies other countries in to changing their laws to suit our tax laws.

[richie]

[ QUOTE ]
You nab it all at once, pay the taxes on it, and go about your business.

The IRS doesn't give a flying hoot about the legality of online gambling, so long as they get their rake. Getting caught buring transactions on the other hand... they care about that deeply.

[/ QUOTE ]

I don't mind paying taxes when I win, but if I (or whoever) go out and lose $10,000 next year I don't get a deduction for losing. I think the IRS should treat gambling like they treat investments. We've already paid taxes on the money we're gambling with.

[Ace upmy Slv]

Can you write off gambling losses against the large withdrawl like you can against a Casino 1099? If it is possible, would that throw up more red flags?

[pretender2k]

I'm not sure if gambling income would be the same but I know there is something where you can go back over the last three years and ammend taxes when you have a huge income one year and not the next year. I would definitely check into that with an accountant. Also if you have a 401K I think you are able to put money into their if your not already doing the full 15% at work. Let's say your taking out 10% at work and had a big windfall somewhere I beleive you can make up the difference upto the 15% limit. Again I am not an accountant so it would be something to ask about.

[Baulucky]

That could not possibly be a +EV decision with ANY amount of money!, unless you like rain!.

[Baulucky]

The easiest (also legal?) way to do this is:

1-Get yourself a "buddy" in a tax free country with a casino/bank/neteller in his name and lose the money to this buddy.

2-The only issue is trust with your "buddy".

3-I only trust myself for large amounts of money.

4-You draw conclusions from here.

[astroglide]

that is still illegal, and sites monitor for chip-dumping

[BradleyT]

Find out the maxiumum amount you can cash without being reported to the IRS at a "check-cashing" place.

Cash out that amount every 3 days until your money is all yours. You pay 2% (fees) instead of 30% (taxes).

[Ace upmy Slv]

So you are saying to definitely NOT cash out using an online service (I assume soemthing like neteller is too tracable)? Just have them issue you a regular check for less than 10K, several times, and use a check cashing service? Now, can the check cashing service get audited for cashing a check like that and then trace it back to you?

[fluff]

So instead of paying 30% taxes, you're advocating chip dumping, which if anything is a sure fire way to get 100% of your money seized by the poker site. That's even more -EV than moving to England.

[astroglide]

yes. if you get audited, they will find this. check cashers report to the irs.

[Baulucky]

I wouldn't advocate that. Just lose it fair and square.

[SamJack]

Start playing $100/$200 tables. /images/graemlins/shocked.gif

Sam

[rhwbullhead]

[ QUOTE ]
Find out the maxiumum amount you can cash without being reported to the IRS at a "check-cashing" place.

Cash out that amount every 3 days until your money is all yours. You pay 2% (fees) instead of 30% (taxes).

[/ QUOTE ]

Wow, somebody here actually offered advice other than the standard "pay taxes on everything."

The only problem I can see is that if you ever transfered or withdrew money using your checking account, you have already left an electronic trail. What do you do if you get audited, and the IRS get your withdrawal history? They can ask party or Neteller to turn over the records. They might not as they are out of the country, but they just might do it so they don't have any hassels. Also, what if the IRS asks you to turn over your withdrawal records? What do you do then, turn over fake records?

[OldLearner]

Canada is a tax-free haven for lottery/gambling winnings, mais non?

[astroglide]

[ QUOTE ]
They can ask party or Neteller to turn over the records. They might not as they are out of the country, but they just might do it so they don't have any hassels.

[/ QUOTE ]

you could get subpoenad and legally forced to acquire/present your neteller (or whatever) transactions in the case of an audit.

[webiggy]

Tax evasion is illegal and the fines paid and jail time served will make you wish you just declared your winnings. Don't forget about the W2-G you'll likely get. Oh and by the way, if you declare your winnings and take a deduction for "gambling losses" on your schedule A, you at least have the benefit of getting the clock running on the statute of limitations. If you don't claim it, they have plenty of time to catch up with you..,

[BradleyT]

You aren't even going through neteller or your bank.

Do a search on MSB.gov, fincen.gov, BSA, Patriot Act, etc..

[driller]

I used to worry about taxes on gambling winnings all the time when I was first learning to count cards at 21. Unfortunately, it never became a problem. /images/graemlins/smile.gif

These days, the chance of getting audited are pretty small, but not 0. It seemes to me that gambling online leaves a lot of trails that the IRS could follow, once they decided to move again. I think they could bring a lot of pressure to bear on a site like party, which is after all not a Swiss bank.

Furthermore what BradleyT is advocating (taking your winnings in amounts less than 10k) is called "structuring" and is a crime in itself.

My advice would be: pray you get your win early, because now your following losses are deductible; keep good records; pay your taxes.

[BradleyT]

Yes it's illegal and tax evasion but the original question was hypothetical for me because I'll never win $50,000 online.

[MRVEGAS]

when you win it email me ill let you use my account to deposit it in and ill worry about it for ya!! /images/graemlins/grin.gif

[Stu Pidasso]

[ QUOTE ]
....didn't some guy in Minnesota or N. Dakota get busted for gambling on the internet? Somebody posted a thread about this guy several months back. He paid his taxes and got screwed for being honest.

[/ QUOTE ]

The guy got busted for internet sports betting. Law enforcement agencies typically go after the bookies and not the mere betters. Its been speculated that he was being being investigated for book making, and after they raided his home, arrested him, and learned he was not a bookie, they decided to charge him with illegal gambling just to save face.

Stu

[soooted]

Simple:

1. withdraw using Neteller ATM to minimize checking account trail.

2. goto B&M cardrooms and casinos, keep a detailed log, make sure you lose often /images/graemlins/smile.gif

3. put $ in 401k or IRA depending on your situation

4. declare your meager winnings. You get the clock running on the IRS, whereas if you evade altogether they can go after you 30 years from now

Note, if you're doing this pro and are trying to move $100k or so worth of cash around... that is a slightly different scenario than a one time thing. How do you explain constantly paying for your mortgage and car payments if you've lost so much? But there are solutions...

[1800GAMBLER]

Next question. How do you spend it?