Tax Question : Claim Total Winnings or Cashout?

[DcifrThs]

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I play on a lot of sites that don't have pocker tracker support.

I have no records for the last year except my cash out and neteller stuff.

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the only site i know and play on regularly that doesn't have readily available data put ON YOUR COMPUTER for you is paradise. i dont keep paradise records but my forthcomingness with the rest of my poker income will be 100%.

i keep meaning to ask my accountant this, and i spoke extremely briefly w/ antoher 2p2er about it but id rather not have to pay tax on(or be able to get more deductible credit for) money i use as my current poker bankroll. since this is a self employed venture, the argument stands that the available funds online is working capital necessary for proper and complete adherence to the variance associated with the business. its a tough argument though b/c corporations pay taxes (or book deferred tax liabilities) on accounts receivable booked with current period income despite the lack of received funds. the longer their days to cash, the worse the business appears in terms of cash flow but they are still liable to the IRS for income booked under US GAAP and filed with the IRS. so that working capital argument may not be all that strong [img]/images/graemlins/frown.gif[/img]

i will have an answer eventually but i thought id just put that out there as it was mentioned to me and discussed w/ another 2p2er.

Barron

[lehighguy]

It's alot harder to keep records of online poker if it isn't tracked by pocker tracker.

I mean, do all those little ten minute sessions count.

[Zetack]

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It's alot harder to keep records of online poker if it isn't tracked by pocker tracker.

I mean, do all those little ten minute sessions count.

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Poker tracker is not put out by the IRS. So what PT calls a session I wouldn't worry about. But if literally you sit down play for ten minutes, get up, go watch television for an hour, come back play ten minutes, get up....yeah those may all count as sessions.

There is some indication that in a B&M setting the IRS wants you to consider each table a different session. But since nobody in the world actually does that, but treats each gambling session as a session, my guess, and let me emphasize guess here, is that you would be alright counting from the time you sit down to play to the time you log off as a session.

--Zetack

[lehighguy]

Well there is absolutely no way for my to get that data. Even going foward it would represent an unfathomable hassle, I would spend as much time keeping records as I spend playing.

[Neurotoxin]

isn't the only reason you need to do this session recording is if you're bracket is going to be under the top? If you've made more than enough to put you into the top bracket can you just go ahead and net?

[billyjex]

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Well there is absolutely no way for my to get that data. Even going foward it would represent an unfathomable hassle, I would spend as much time keeping records as I spend playing.

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I am in the same boat as you lehigh. I guess I ignored the whole tax thing and now i'm starting to realize how serious it is. That's not to say I don't have money saved up -- an extremely vague estimate is I have made 40k this year, and I have about 11k for taxes (I know I will need more for this, and I will have to dive into my roll [img]/images/graemlins/frown.gif[/img]

It is frustrating because I am just a young college kid who just happened to start making a shitload of money on my computer. Obviously I know this argument gets me nowhere with anyone so I need to contact an accountant ASAP.

[MicroBob]

first - my record-keeping is for crap....New Year's Resolution anyone?
So my opinions aren't exactly coming from someone who does as he preaches.


Lehigh - if you're going pro you will have to learn record keeping.
'session' doesn't have to mean each freaking table or each 10 minutes trip before going out and taking out the garbage and then coming back for 10 minutes more.

(disclaimer that I'm not a tax-expert) - If you just had a log/chart that on Dec 8 you played a total of 5 hours on site A at limits 5/10 and 10/20 and you also played 2 hours in a tournament on site B and you had your updated bankroll change for the day that would likely be sufficient.
(you would show that on site A you were +$600 and your roll on that site went from $9400 to $10000 and your total roll was adjusted same of course. On site B you busted out of a $109 tourney...so your roll on that site needs to be shown too).

It is on you to prove these things.
I believe it specifically says somewhere that in order to file a schedule-C you need to keep accurate records of your income (just like any regular small-business owner would have to).

It doesn't have to be something so detailed that it becomes ridiculously time-consuming. Just a couple different ledgers for the sites that you played at on that day. You can probably get away with counting the whole day as a 'session'. This particular session included 1000 cash-game hands AND a tournament.


Get Gamblers Guide to Taxes by Walter Lewis for more info (nothing on internet-gambling...but plenty of other stuff for professional and recreation gamblers).
Also be sure to read all of Ed Miller's upcoming articles on various tax stuff in future editions of the 2+2 mag (his first article on this was in Nov).

[lehighguy]

When the new year starts I was planning to declare myself pro and talk to a tax guy. But as the other poster said, I'm just a college student that fell into a pile of money. My records for last year will be really sketchy.

[Zetack]

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Well there is absolutely no way for my to get that data. Even going foward it would represent an unfathomable hassle, I would spend as much time keeping records as I spend playing.

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How is it possible going forward that this is such a hassle it'll take as much time as you spend playing poker? What, are your sessions 90 seconds long?

Try this oh so complicated method. 1. Keep a notebook next to your computer that's only for poker. 2. Finish playing. 3. open notebook 4. Write date. 5. Write down site(s) played on. 7. Write amount won or lost. 6. Close notebook.

Crap that took 45 seconds, how are you ever going to stand it?

At the end of the year you're going to have to account for bonus's and rakeback as well so you might have a page of your note book for each of those things as well.

--Zetack

[lehighguy]

A lot of times I log on for 10, 20, 30 min. I play on multiple sites at once. It's a rediculous hassle, especially in light of the fact that I'm only going to be charged based on the net amount. All of that extra accounting is pointless.