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#21
10-02-2005, 06:11 PM
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Re: Is rakeback taxable?
[ QUOTE ]
[ 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. [/ QUOTE ] Thats exactly why you're wrong, you didn't pay taxes on the rakeback money. I'll restate my earlier example, and the example that chris stated. You play a session of poker, You Make $10,000, however $2,500 goes to rake, so you only have a profit of $7,500. So now you are only paying taxes ont he $7,500 profit, NOT the $2,500 rake. Now, you get $1,000 of that rake back. You never paid taxes on it, because you counted it as part of your losses when you were figuring your profit out in the first place. You must either, 1. Pay taxes on the rakeback as income you are recieveing right now, or 2. Not deduct the rake that you know you will get back from the profits you made in the first place. Either way, you are paying taxes on it. IF rake is just money that you are paying to poker sites for a service, then you don't get to deduct that from your income. If rake is a business expense and you get to deduct it from your income, then you can't deduct the part of it that you get back. I don't think there are any more ways that I can say this, I appreciate that you are willing to listen, but if you are not paying tax on your rakeback, in either of hte two ways I have discussed, then you are breaking the law, which of course is fine to do, but at your own risk. Advising others on these boards though that rakeback is not taxable, which could cause them to break the law by relying on your advice, is no good. I am not yet a full fledged attorney, I do have about 6 more months of law school, and I don't like tooting my own horn, but I did take tax, I got an A, I have some idea what I am talking about, and this issue isn't even close. 
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#22
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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#24
10-02-2005, 08:46 PM
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Re: Is rakeback taxable?
[ 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, and the burden is on the taxpayer, not the government, to prove that they did no wrong. (At least for the government recovering damages and penalties).
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#25
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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#26
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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#27
10-02-2005, 09:55 PM
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Re: Is rakeback taxable?
[ 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.
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#28
10-02-2005, 10:06 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 ] 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.
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#30
10-02-2005, 10:11 PM
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Re: Is rakeback taxable?
[ 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?
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