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#1
10-01-2005, 07:52 PM
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Re: Is rakeback taxable?
[ QUOTE ]
[ QUOTE ] I posted in one of the other 100 threads on this topic that i was of the firm belief that RB was NOT taxable -- I subsequently got flamed hard, although I stand by my position. I won't make any more posts in this thread; search for the other threads on this topic if you care to see my take on it. Bring on the flames. [/ QUOTE ] If it wasn't taxable then pretty much anything with sales tax on would be sold with the store providing a "gift" to the buyer later, to minimize taxes. [/ QUOTE ] OK, i lied: THIS will be my last post in this thread. RB isn't taxable for the same reason that mail-in-rebates aren't taxable as regular income. Yes, I've heard the counterarguments. I disagree with them. 
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#2
10-01-2005, 08:54 PM
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Re: Is rakeback taxable?
Ok then what about bonuses? those should be non taxable for sure then especially when you don't have to play to earn some of them, i.e. the royal flush club bonuses on empire
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#3
10-01-2005, 09:38 PM
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Re: Is rakeback taxable?
[ QUOTE ]
[ QUOTE ] [ QUOTE ] I posted in one of the other 100 threads on this topic that i was of the firm belief that RB was NOT taxable -- I subsequently got flamed hard, although I stand by my position. I won't make any more posts in this thread; search for the other threads on this topic if you care to see my take on it. Bring on the flames. [/ QUOTE ] If it wasn't taxable then pretty much anything with sales tax on would be sold with the store providing a "gift" to the buyer later, to minimize taxes. [/ QUOTE ] OK, i lied: THIS will be my last post in this thread. RB isn't taxable for the same reason that mail-in-rebates aren't taxable as regular income. Yes, I've heard the counterarguments. I disagree with them. [/ QUOTE ] Even if your argument were correct, and rakeback wasn't taxable as separate income (and it is) for the same reason as mail in rebates, then you would still have to add your rakeback to your total profit and then just pay taxes on the profit. Do you see why? For Example In one session, you lose $500, and Earn $750 amongst your tables, giving you a profit of $250. Part of that $500 loss was money that you paid in rake, lets say $25. If you're getting the $25 back, then it wasn't a loss, and you would have to report a profit of $275 so you are still paying tax on the money you paid in rake. You basically have to pay tax on everything you earn. You have already paid the tax on a rebate because it is money that you spent from your income which was already taxed. This is not true of rakeback, which has not been taxed. You can't have a realization event that isn't a gift and not pay taxes, thems the breaks.
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#4
10-02-2005, 12:09 AM
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Re: Is rakeback taxable?
you seem to know your stuff, what about a deposit bonus?
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#5
10-02-2005, 09:11 AM
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Re: Is rakeback taxable?
If rakeback is not taxable, then rake is not deductible.
So, if you won $10,000, but paid $5,000 in rake, you should pay taxes on the entire $10,000. Because you think rake doesn't count, for some reason. Feel free to try to convince the IRS that the money you made doesn't count as income, but all the money you paid does count as deductions, though. The IRS will certainly let you get away with anything, they're terribly nice and reasonable and want to see you paying as little tax as possible.
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#6
10-02-2005, 04:18 PM
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Re: Is rakeback taxable?
God help me, I can't stay out of this thread.
Imagine you pay a painter $10,000 to paint your entire house. A month after he's finished, you notice some of the paint peeling, and complain to the painter. The painter acknowledges that the paint he used was of inferior quality, and agrees to refund $2,500 of your payment. You think that $2,500 is taxed as regular income? Laughable.
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#7
10-02-2005, 06:14 PM
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Re: Is rakeback taxable?
I'll actually use my accounting degrees for a change and say that unless the laws changed drastically in the 3-4 years since I was in school, YES, rakeback is taxable. If you play for a living, you know to report it. If you play a little for fun, it's likely no one will notice the difference of a few hundred dollars and you can plead ignorance and pay back taxes relatively easy if you get caught.
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#8
10-02-2005, 09:19 PM
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Re: Is rakeback taxable?
For the record, gifts are taxable. Unless, of course you are a nonprofit organization, which you are not. Unless your mission is to donate money at the tables to poor pathetic gamblers so that they will have more money to play with.
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#9
10-02-2005, 09:39 PM
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Re: Is rakeback taxable?
[ QUOTE ]
For the record, gifts are taxable. Unless, of course you are a nonprofit organization, which you are not. Unless your mission is to donate money at the tables to poor pathetic gamblers so that they will have more money to play with. [/ QUOTE ] Well, gifts under a certain amount depending on from whom are not, but this doesn't qualify as a gift because there is no donative intent on the part of the the person giving the rakeback.
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