Is r***back taxable income?

[broiler]

Capital gain? Are you joking? Rakeback does not involve a sale or deemed sale of property in any way. Your description of how a pro gets capital gain is not correct. A rakeback payment is a return of a deduction from an item that is treated as ordinary income, therefore it is also ordinary income. There is no argument that a rakeback payment is capital gain.

[kickingit]

it would be an investment,
stock dividen is you just getting back part of your investment, decreasing your basis in the investment

and i am saying either way its getting taxed but at what rate?

[broiler]

You are comparing apples and oranges.

In a stock dividend, you are receiving more stock, which is a capital asset. You already own shares of the corporation issuing the dividend. A stock dividend does not decrease your overall basis in the stock. The basis is merely spread out across a greater number of shares.

Rakeback is no way related to a capital asset. Rakeback is a refund of your expenses for playing. You are receiving cash from an entity in which you have no ownership interest. Therefore, the payment cannot be a dividend, which would not receive capital gain treatment in this situation as the poker sites do not have securities that would qualify for the reduced dividend rate treatment. A return of any deduction item will always be income of the same type as the deduction.

[kickingit]

i said a capital going would be a strech
if you could find a way to tie it to it

rakeback is ordnary income and is taxed that way.