Taxes and Online Poker

[aw1978]

Hello, first time poster, though I've been following the forums for some time now.

I know this topic has been rehashed in the past, but I just wanted to get some clarification on some things. I understand that aggregate gambling winnings must be added to income for tax purposes while aggregate losses must be taken as itemized deductions.

However, the definition of a "gambling session" is somewhat nebulous. For example, I play single table NL hold'em tournaments, 3-4 tables at a time. This is a continuous activity (I start a new table as soon as I finish one) for x hours per day. So, if I have a winning day, does that count as one session? Or, would I have to actually add up tournaments in-the-money as income, and (total tournament losses) * (buy-ins) as an itemized deduction?

That seems to be the nit-picky letter of the law, though I think it fails a "common sense" test. Any CPAs or tax attorneys out there?

http://www.onlinepokerfaq.com/guide/us-taxes.html

[Jeffage]

This is indeed a gray area. Most people take one day as one session I believe. But I'm not an accountant and this advice is worth exactly what you paid for it.

Jeff

[caliente]

I can't find any mention of a "session" at www.irs.gov. Can someone provide a reference of where "session" is mentioned in the US tax code, IRS publication or a court case?

[randomstumbl]

I just want to add in that it doesn't really matter how you divide it up if you're itemizing your deductions already. Of course, if you're not, you want as long of sessions as possible.

[aw1978]

As you said, it's not as material if you're itemizing deductions already, but others may lose their standard deduction.

Also, total in-the-money gambling income could push you up to a level of income that disqualifies you to make a Roth IRA contribution. Alternative Minimum Taxes may also be an issue.