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#31
10-02-2005, 10:55 PM
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Re: Is rakeback taxable?
[ QUOTE ]
[ QUOTE ] Meh - i don't pay taxes to your government anyhow. God bless the Commonwealth. [/ QUOTE ] So let me get this straight, you took it upon yourself to give out bad legal advice on a subject which you not only have no information about, but for a country's legal system that you don't even live in? [/ QUOTE ] I do live in this country. Aliens don't pay taxes to the IRS on foreign-source income, but I'm sure you knew that already. I never gave legal advice, just an opinion. I am a 3L at a school far better than yours. As you were. 
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#32
10-02-2005, 11:18 PM
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Re: Is rakeback taxable?
[ QUOTE ]
[ QUOTE ] [ QUOTE ] Meh - i don't pay taxes to your government anyhow. God bless the Commonwealth. [/ QUOTE ] So let me get this straight, you took it upon yourself to give out bad legal advice on a subject which you not only have no information about, but for a country's legal system that you don't even live in? [/ QUOTE ] I do live in this country. Aliens don't pay taxes to the IRS on foreign-source income, but I'm sure you knew that already. I never gave legal advice, just an opinion. I am a 3L at a school far better than yours. As you were. [/ QUOTE ] Wrong again. Online poker played within the United States doesn't qualify as foreign source income as it is money being made through an activity taking place substantially within the United States. (Unless you're only playing when you fly home on breaks). At this point, I'm done responding to you. I stand by my previous comments, if you don't believe me contact a tax lawyer, an accountant, or the IRS, I am quite confident they will agree with me. Oh, and as for: [ QUOTE ] I am a 3L at a school far better than yours. [/ QUOTE ] I doubt that,I go to a pretty good school, but if you do, then thats pretty sad that you go to such a good law school but still can't answer such an elementary tax question as this correctly.
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#33
10-02-2005, 11:41 PM
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Re: Is rakeback taxable?
[ QUOTE ]
[ QUOTE ] [ QUOTE ] how many times does he have to explain it? it is very clear. it seems you want to be dense purposely just to save a few bucks. [/ QUOTE ] Unfortunately for him, and ESPECIALLY when dealing with Tax Law, ignorance of the law is not a defense [/ QUOTE ] YOU are the one being ignorant. he has explained it perfectly and you still choose to ignore what he has said. [/ QUOTE ] After rereading this series of posts, I'm thinking that you were probably meaning to respond to TeddyFBI with this comment and not me? Otherwise, it doesn't really make sense given your earlier post...
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#34
10-03-2005, 12:16 AM
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Re: Is rakeback taxable?
[ QUOTE ]
[ QUOTE ] [ QUOTE ] [ QUOTE ] how many times does he have to explain it? it is very clear. it seems you want to be dense purposely just to save a few bucks. [/ QUOTE ] Unfortunately for him, and ESPECIALLY when dealing with Tax Law, ignorance of the law is not a defense [/ QUOTE ] YOU are the one being ignorant. he has explained it perfectly and you still choose to ignore what he has said. [/ QUOTE ] You obviously did not read my post, or are incapable of understanding it,I really can't explain it in any more ways. It is taxable, and I responded to his analogy and explained why it is incorrect. You don't have to believe me, I don't really care, call an accountant or a tax lawyer and they will tell you the same thing. Call the IRS and they will also tell you the same thing. Rakeback is taxable, its as simple as that. [/ QUOTE ] my apologies, i thought you were teddy. [img]/images/graemlins/crazy.gif[/img]
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#36
10-03-2005, 11:42 AM
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Re: Is rakeback taxable?
Here is the last thread on the subject, where I and a tax professional consider the possibility that it is not taxable income but rather a rebate of service costs:
http://forumserver.twoplustwo.com/sh...t=all&vc=1 There are so many people on this thread who know nothing about tax law providing forceful opinions on the matter. Its just silly. Just because the rakeback could be excluded doesn't mean the original rake should be included as taxable income as a matter of law. I know, it would be "fair", its consistent, etc. But you should have learned in Kindergarten that the world is not always that black and white. Since many of you obviously didn't, let this one be a lesson. There are many instances in the application of tax law where inconsistent treatment reigns. This may be one of them; rake paid is clearly excludable from gambling winnings, rakeback is arguably a rebate of service costs. "Arguably" has a certain meaning here. It doesn't mean you would win the argument. But if you can present a reasonable argument you can reasonably exclude the rakeback. If you get audited and lose the argument (or choose not to really fight it) you can pay up with interest but with no other penalties because you had a reasonable basis. To the best of my knowledge (with some research on the matter) there have been no rulings, regulations, or cases where the rebate argument has been definitively addressed by the service or tax court. Oh, and don't act on this as advice. It's an opinion. Consult your tax advisor on the matter before taking a position.
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#37
10-03-2005, 11:51 AM
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Re: Is rakeback taxable?
[ QUOTE ]
Here is the last thread on the subject, where I and a tax professional consider the possibility that it is not taxable income but rather a rebate of service costs: http://forumserver.twoplustwo.com/sh...t=all&vc=1 There are so many people on this thread who know nothing about tax law providing forceful opinions on the matter. Its just silly. Just because the rakeback could be excluded doesn't mean the original rake should be included as taxable income as a matter of law. I know, it would be "fair", its consistent, etc. But you should have learned in Kindergarten that the world is not always that black and white. Since many of you obviously didn't, let this one be a lesson. There are many instances in the application of tax law where inconsistent treatment reigns. This may be one of them; rake paid is clearly excludable from gambling winnings, rakeback is arguably a rebate of service costs. "Arguably" has a certain meaning here. It doesn't mean you would win the argument. But if you can present a reasonable argument you can reasonably exclude the rakeback. If you get audited and lose the argument (or choose not to really fight it) you can pay up with interest but with no other penalties because you had a reasonable basis. To the best of my knowledge (with some research on the matter) there have been no rulings, regulations, or cases where the rebate argument has been definitively addressed by the service or tax court. Oh, and don't act on this as advice. It's an opinion. Consult your tax advisor on the matter before taking a position. [/ QUOTE ] Don't question Jman's credentials. After all, he got an A in his 2L tax class. His mom also says he's the coolest guy she knows. (thanks for the link)
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#38
10-04-2005, 03:23 AM
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Re: Is rakeback taxable?
Rakeback and bonuses are equivalent to a B&M poker room giving you a comp (e.g. free meal, free show tickets, etc.) because you play there a lot. It is a very well settled point of law that comps are gambling winnings. That means that losing amateur players can deduct their gambling losses equal to the amount of their rakeback and bonuses on Schedule A.
If you are a winning player than you owe tax on your rakeback. BTW, I am so tired of tax discussions that suggest rake is some sort of expense. Rake is taken out of the pot before anyone wins it. If you put $20 in a slot machine and $98 comes out you just won $78. If you put $20 in a pot and the dealer gives you $98 at showdown you just won $78. The other $2 that was raked is money that never belonged to you and which you didn't win. It has nothing to do with your taxes. That's why the rebate argument is spurious. You never paid in the first place.
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#39
10-04-2005, 04:41 AM
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Re: Is rakeback taxable?
But couldn't rakeback just be considered as like a rebate?? It's not "earnings" at all, it's just a discount you receive. Like when you get your tax refund. I'm not worried since I live in a country where you don't have to pay tax on gambling income, just curious.
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#40
10-04-2005, 04:22 PM
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Re: Is rakeback taxable?
[ QUOTE ]
iirc, coupons and rebates aren't taxed RB shouldnt be but i bet it is. just fudge things [/ QUOTE ] Your post is not quite correct. Rebates are not taxed as income IF the product for which you received the rebate is for personal/business use. But if you get rebates for merchandise that is being resold then you have to pay taxes on the rebate amount. If you read the tax code you'll find out that "rebate reduces your cost" and as such increases your profit and therefore is taxable.
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