Question about taxes....

[broiler]

The foreign account gets reported to thr Treasury and it isn't due until June 15. Most people just do it at the same time as their taxes for the year.

[rockythecat99]

thanks for the quick reply broiler. much appreciated.

[Dave D]

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thanks for the quick reply broiler. much appreciated.

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Yeah this is something that gets argued about a lot. Personally, I wouldn't report anything until you actually cash it out. What if over the next month you play a bunch of high end tourneys and lose it all? Reporting it as income would just be silly. Reporting what you cash out (and don't cash back in) makes the most sense. I'd also count it as "gambling" the same way as if I went to the casino.

I do *not* believe the account counts the same way as a foriegn bank account, as I'm pretty sure party says in their TOS that money in your account has no actual cash value, and they can take it at any time. If they can take it at any time, it's definatly not a bank account. It's the same way in casinos, the chips have no cash value and the casino can take them at any time. They just usually dont b/c it looks really bad if you go to the media.

[benneh]

from what i understand you only have to report what you cash out. it goes in some column marked internet gambling ro something.

right now, as longa sthe moneyh is in your account, it's working capitol or something, not income.

[AtticusFinch]

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from what i understand you only have to report what you cash out. it goes in some column marked internet gambling ro something.

right now, as longa sthe moneyh is in your account, it's working capitol or something, not income.

[/ QUOTE ]

Not entirely true. You are allowed to count losses against earnings (to a limited degree, and in a complicated fashion which is beyond the scope of this thread), but once the calendar year ends, you're technically required to report your profits even if you haven't cashed out.

My best advice is to keep careful track of all of your play, wins and losses, and just hand your records over to a good gambler's accountant. There are guys out there who specialize in doing taxes for Poker players, and the $250 they'll charge you to do your return will be well worth it if you have even one big score.

[broiler]

There really isn't much argument about tournament winnings and reporting. Gambling income is supposed to be reported by session. There is no correct justification for considering a different tournament on a different day as part of the same session. I would love to say that netting is ok, but the rules just don't work that way.

The foreign reporting rules apply to more than just foreign bank accounts. If you read the rules, it clearly says any account in which you have a financial interest. Party's TOS do not matter, their actions in regards to your account are what matter. You have the ability to withdraw your funds at any time, therefore you own the account.

Finally, chips are cash. The IRS has won this case against gamblers who used to keep their chips in safety deposit boxes at the casino. The gamblers tried to use your cash out theory and lost with full penalties for their efforts.

Anyone gotten in trouble for breaking the rules in this area? How much do you need to make before you should start reporting it?