#11
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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. |
#12
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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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#13
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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. |
#14
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Re: Is rakeback taxable?
you seem to know your stuff, what about a deposit bonus?
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#15
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Re: Is rakeback taxable?
26 USC §61: Gross income includes all income from whatever sources derived.
Yes, Bonuses are income, and they are taxable. |
#16
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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. |
#17
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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. |
#18
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Re: Is rakeback taxable?
[ QUOTE ]
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. [/ QUOTE ] What part of my analogy did you not understand? Even if rakeback isn't taxable (and it is), then you still can't deduct the money you paid in rake from your profits per session, meaning that you include that rake you got back in your profits, meaning you pay tax on it anyway!!! The painter analogy is way off, you are not paying for a service here, like getting your house painted, you are paying a cost associated with a profit making business activity. At best, rake is a business expense as part of your profit making activity, and if you are getting part of that expense back, then you cannot deduct it from your income. Do you see why? This isn't something that is opinion based, I'm sorry, there is a correct answer, and the correct answer is that it is taxable. Read the tax code, or if you don't believe me, speak to a tax attorney. At its heart, the tax code is really simple: Everything is taxed. Its either taxed as a capital gain, or taxed as income, or something else. The only way it might not be taxed is if its a gift, and rakeback is not a gift, and don't even try to argue that it is, because it would be an incorrect argument. All the analogies I have seen thus far are regarding money that has ALREADY been taxed, and thus you do not have to pay taxes again. The $2500 you got back from the painter resulted in you gaining no net profit, that was $2500 that you had already paid taxes on when you made it. Getting rakeback is a realization event, it results in profit, it is taxable. It is money you are getting that you didn't have before, either its money you're making right there, or its you getting money back that you earlier paid as a business expense and which you have already deducted from the profits or added to the losses you made in any particular session. Whichever way you look at it, it is taxable. |
#19
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Re: Is rakeback taxable?
[ QUOTE ]
What part of my analogy did you not understand? Even if rakeback isn't taxable (and it is), then you still can't deduct the money you paid in rake from your profits per session, meaning that you include that rake you got back in your profits, meaning you pay tax on it anyway!!! The painter analogy is way off, you are not paying for a service here, like getting your house painted, you are paying a cost associated with a profit making business activity. At best, rake is a business expense as part of your profit making activity, and if you are getting part of that expense back, then you cannot deduct it from your income. Do you see why? This isn't something that is opinion based, I'm sorry, there is a correct answer, and the correct answer is that it is taxable. Read the tax code, or if you don't believe me, speak to a tax attorney. At its heart, the tax code is really simple: Everything is taxed. Its either taxed as a capital gain, or taxed as income, or something else. The only way it might not be taxed is if its a gift, and rakeback is not a gift, and don't even try to argue that it is, because it would be an incorrect argument. All the analogies I have seen thus far are regarding money that has ALREADY been taxed, and thus you do not have to pay taxes again. The $2500 you got back from the painter resulted in you gaining no net profit, that was $2500 that you had already paid taxes on when you made it. Getting rakeback is a realization event, it results in profit, it is taxable. It is money you are getting that you didn't have before, either its money you're making right there, or its you getting money back that you earlier paid as a business expense and which you have already deducted from the profits or added to the losses you made in any particular session. Whichever way you look at it, it is taxable. [/ QUOTE ] pwn3d. |
#20
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Re: Is rakeback taxable?
[ QUOTE ]
...The $2500 you got back from the painter resulted in you gaining no net profit, that was $2500 that you had already paid taxes on when you made it... [/ QUOTE ] i'm open-minded and willing to listen to what you have to say. Just explain to me why it is that the above quote applies to monies you pay to a painter, but NOT monies you pay to a poker site. Either way, it's money that you've already paid taxes on, "when you made it", as you say. |
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