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#21
02-15-2005, 10:03 PM
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Re: SNG tax question
[ QUOTE ]
[ QUOTE ] Rohjoh, yuk, the bearer of bad news. OK, so let's say I'm audited. I've played 6,000 SnGs in 2005. I average a little under $10 a game, but let's just use $10. That's $60,000 in net income. It cost me $198,000 to win $258,000. So you're saying that the IRS is gonna tax me on $258,000 in winnings? [/ QUOTE ] No, but you have to declare the $258k winnings as income. Then you can deduct the $198k in losses and only have to pay tax on the $60k profit you made. The problem is that the extra income causes side effects which may make your taxes more complicated. [ QUOTE ] Then my next question is, how do they know how many 'sesions' I've played except through what I report. For example, why couldn't I just report 12 sessions per year? Party Poker doesn't provide this info to me. How can anyone, including the IRS, prove how many sessions I've played? [/ QUOTE ] They know because you report it. And if you get audited, you have to prove to the IRS that what you reported is accurate. They don't have to prove that it isn't, only that you can't prove it is. [/ QUOTE ] While this all seems somewhat correct, there are a couple points I'd like to bring up... #1 Considering the fact that the IRS can't say that every single pot you drag is counted as income, then losses are deducted from that, I think they'd have a similar hard time with a good lawyer saying the SNG entry fee is like putting $$$ in the pot. When I buy in at a table for $215 in a cash game, if I leave with $400, they can't say I made $400 income. I think they'd be hard pressed to say that if I bought into a SNG with the same $215 and got 3rd place for $400 that it's $400 worth of income. 2. I'm pretty sure you can get around the whole gross winnings as income by filing as a professional gambler. Then everything is plus/minused for total income before a final figure is set for claiming purposes. 
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#22
02-15-2005, 10:18 PM
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Re: SNG tax question
What do you mean by itemizing losses?
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#24
02-15-2005, 11:31 PM
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Re: SNG tax question
[ QUOTE ]
So if poker was my only source of income I would have to report it as income and pay tax on it in Canada? Are you sure of this? What about if I make more money playing poker then at my job but play only part-time do I have to pay tax on that? It was my understanding that in Canada you must report income earned by gambling but not pay taxes on it. Is this untrue? [/ QUOTE ] So in general search the web for more information. There is a FAQ out there in general as all this is a frequent thread on r.g.p. In Canada IIRC the rule isn't if you are professional or not (which in the US effects if you can declare net winnings, in the US professional is good for your taxes), but rather if you are involved in running the gambling. So a casino or casino owner needs to pay taxes on gambling winnings. It is debatable if a prop would have to pay income on their winnings in Canada. There was a case where a person who gambled for a living was tried to make to pay taxes on his winnings but IIRC the courts reversed it. But if you are in doubt, get a tax accountant!
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#25
02-15-2005, 11:36 PM
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Re: SNG tax question
You log out from PP? [img]/images/graemlins/cool.gif[/img]
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#26
02-15-2005, 11:37 PM
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Re: SNG tax question
[ QUOTE ]
I'm pretty sure you can get around the whole gross winnings as income by filing as a professional gambler. Then everything is plus/minused for total income before a final figure is set for claiming purposes. [/ QUOTE ] Is there some sort of minimal requirements to file as a "professional gambler"?
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#27
02-15-2005, 11:47 PM
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Re: SNG tax question
[ QUOTE ]
[ QUOTE ] I'm pretty sure you can get around the whole gross winnings as income by filing as a professional gambler. Then everything is plus/minused for total income before a final figure is set for claiming purposes. [/ QUOTE ] Is there some sort of minimal requirements to file as a "professional gambler"? [/ QUOTE ] I don't believe so, You ujust have to show a profit in 2 out of three years, and you have to be able to show you have a skill that allows you to win, i.e. you can't be a slot pro.
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#28
02-16-2005, 01:12 AM
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Re: SNG tax question
Most of the advice I've read (including some an article about a past IRS audit of a gambler) say that if you have a substantial amount of income from a non-gambling source,, the IRS is less likely to accept "Gambler" as your profession.
http://forumserver.twoplustwo.com/fa...mp;postmarker= I only play about 20 hours a week and generated about 20 times the income at my day job, so I'm certain I cannot get away with calling myself a professional gambler. Incidentally, last year was my first playing. This year my "day job" is only about 2.5 times more income (appropriate, since I usually work about a 50 hour week).
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#30
02-16-2005, 11:20 AM
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Re: SNG tax question
[ QUOTE ]
[ QUOTE ] [ QUOTE ] I'm pretty sure you can get around the whole gross winnings as income by filing as a professional gambler. Then everything is plus/minused for total income before a final figure is set for claiming purposes. [/ QUOTE ] Is there some sort of minimal requirements to file as a "professional gambler"? [/ QUOTE ] I don't believe so, You ujust have to show a profit in 2 out of three years, and you have to be able to show you have a skill that allows you to win, i.e. you can't be a slot pro. [/ QUOTE ] Filing as a professional makes the calculation easy, but it also makes you self-employed and requires you to pay self-employment taxes. Not a good idea if the only reason to do it is to make the record keeping easier. My plan is to record the total of winning days as income and the total of my losing days as deductions for 2004. I am filing as a professional in 2005.
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