Party Poker and taxes

ClaudCunningham · #1 01-25-2005, 08:31 PM

In regard to an earlier post, this fella was worried about tax liability with party poker winnings.. How is there a tax liability...or how is his win "tracked" ?? Does your bank "1099" deposits over 3000 now too???

Lloyd · #2 01-25-2005, 08:47 PM

You're confusing tax liability with reporting of wages. There is clearly a tax liability to the extent that your gambling wages exceed your gambling losses (and certain other expenses associated with playing). Party Poker does not report your gambling activities but that doesn't relieve you of the obligation to do so yourself. Your bank will report transactions that exceed $10k, but again, you still have an obligation to claim your net winnings on your return even if you never transfer more than $10k.

What he is worried about is not the reporting of gambling winnings (he stated that they were professionals and therefore keep detailed records of winnings and losses and report accordingly). He was concerned with being able to deduct the $20k they were paying to the other player as part of their deal. When they transfer those funds into their bank account, the amount will be reported to the IRS. They will have to claim the full amount as winnings and can offset what they pay but need some type of record for IRS proof.

ClaudCunningham · #3 01-25-2005, 08:50 PM

thanks Loyd... So when its an amount less then 10K it becomes a moral issue i believe !

sfwusc · #4 01-25-2005, 08:55 PM

Get audit and the IRS will tell you otherwise.

They ask for bank statements and they can prove you just commit a felony. Look at what you sign on the 1040!

SWUSC

Lloyd · #5 01-25-2005, 08:59 PM

[ QUOTE ]
thanks Loyd... So when its an amount less then 10K it becomes a moral issue i believe !

[/ QUOTE ]

No, it's certainly a legal issue. If you are caught you are committing tax fraud which is a federal offense and punishable with time in federal prison and/or fines.

sfwusc · #6 01-25-2005, 09:00 PM

I dont think you can play poker from behind bars either.

SWUSC

gazarsgo · #7 01-25-2005, 09:58 PM

[ QUOTE ]
I dont think you can play poker from behind bars either.

SWUSC

[/ QUOTE ]

Dude what are you talking about? from behind bars he will be able to win a lifetime supply of cigarettes to trade for cash to dump to the guards in exchange for favors! He will live like a king if he does get sent to jail.

sfwusc · #8 01-25-2005, 10:28 PM

Maybe you watched rounders one time to many?

lol,
SWUSC