When are internet poker earnings taxable income?

zoomer · #1 03-04-2005, 07:25 PM

I know you have to pay taxes on poker earnings, but my question is when are those earnings really earnings. You play and win at an online poker site account and the earnings are put into that account when you leave the table. You withdraw the earnings from the poker site account into a neteller account. Then you withdraw earnings fron the neteller account into your local bank account. Right now I'm building up my bankroll so I'm leaving it in the neteller account. My thinking is that until the earnings have been deposited into my local bank account, they are not income. That is where I can get my hands on the earnings. Is this right? Or are they taxable when they are moved into the neteller account? Or are they taxable when they are in the poker site account? Thanks.

felson · #2 03-04-2005, 07:26 PM

They are taxable when you drag the pot.

EDIT: well, actually when you stand up from the table. according to most people anyway.

Lottery Larry · #3 03-07-2005, 04:52 PM

I believe the latter is correct. It would be impossible to record a hand-by-hand session.

Cash in, cash out covers the range of a reportable session at the tables so I assume it is the same for online.

Niediam · #4 03-07-2005, 05:57 PM

Cash in - cash out is NOT how you report winnings from a B&M casino. It is done on a session basis.

Lottery Larry · #5 03-07-2005, 06:38 PM

[ QUOTE ]
Cash in - cash out is NOT how you report winnings from a B&M casino. It is done on a session basis.

[/ QUOTE ]

What are you calling a session and does it differ from what I said already?
"Cash in, cash out covers the range of a reportable session at the tables"

Sorry, did you read this as cashing out from the casino? I meant from each table as you play.

dakine · #6 03-09-2005, 02:58 AM

[ QUOTE ]
They are taxable when you drag the pot.

EDIT: well, actually when you stand up from the table. according to most people anyway.

[/ QUOTE ]

When your "Net" winnings!! is $600 or more. Ask your profesional Tax preparer.

Lottery Larry · #7 03-09-2005, 01:14 PM

I believe you are wrong

Or are you talking about issuing a W2-G?

Greg (FossilMan) · #8 03-04-2005, 08:14 PM

I doubt the IRS would treat online poker any differently than live poker in this regard. And for live poker, you are supposed to be tracking your results on a session-by-session basis. So, I would say that everytime you finish a session, you have a taxable result. If it's a win, it goes in the win column, and the losses go into the loss column, just like playing in live games.

However, I doubt this issue has been litigated much, if at all, so there is no definitive answer. Plus, I'm not an expert, so if you rely upon my views, you're foolish to do so.

;-)

later, Greg Raymer (FossilMan)

Yeknom58 · #9 03-04-2005, 09:13 PM

"Plus, I'm not an expert, so if you rely upon my views, you're foolish to do so."

I love disclaimers like this.

I'm thinking once you deposit into the the site that's the start of one long session and once the money leaves the site that's the end of that session...so I'm thinking it's the neteller transactions but I add the same disclaimer as above.

J.R. · #10 03-04-2005, 10:40 PM

your disclaimer is very relevant to the advice you gave.