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Old 10-31-2005, 12:26 AM
AZK AZK is offline
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Default yes another TAX question....

OK, this is my first year filing taxes. I'm meeting with an accountant who has talked to my parents and basically just wants me to give him a number. He wants a number of everything both on site and off site. At first this didn't make much sense to me, as I was planning to just give him a number of actual cash I've taken out or deposited to bank account. I didn't want to give him a number that included money on say party because I didn't think it was taxable until I withdrew it from site. Also I didn't want to pay taxes on money that I could potentially lose and then still have to pay taxes since I claimed X and now it's X - Y. I was talking to a fellow 2+2er who said the right way would have been to just use PT and group all wins and all loses and provide that info. with records, etc... The only records I keep are records of when the $ on cyberspace gets moved to the bank or to cash. So WTF should I do? He said it probably looks shady just reporting a # and no records of how/when I got there...thoughts? How should I handle this situation, in the future how should I avoid this headache? I only really use PT on party and not other sites, so I should probably start working up an excel spreadsheet for all, huh?

Thanks.
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  #2  
Old 10-31-2005, 12:32 AM
BottlesOf BottlesOf is offline
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Default Re: yes another TAX question....

I'm assuming youlive in the US.

[ QUOTE ]
I didn't want to give him a number that included money on say party because I didn't think it was taxable until I withdrew it from site.

[/ QUOTE ]

This is false. You owe taxes on it, regardless of whether you withdraw it or not.

[ QUOTE ]
he only records I keep are records of when the $ on cyberspace gets moved to the bank or to cash. So WTF should I do?

[/ QUOTE ]

Start keeping records from here on out. Do you not have PT? Get it. If you do have it, then you have all the records you need. As for the past: You are supposed to provide a good faith estimate of wins and losses, and indicate it's an estimate. Your "wins" are the sum of all winning sessions, and "losses" are the sum of all losing sessions. How "sessions" are defined is a little murky, but you should just try your best based on your results.
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  #3  
Old 10-31-2005, 12:37 AM
AZK AZK is offline
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Default Re: yes another TAX question....

Yes, I live in the US. Yes, I have PT, but don't use it for certain NL games or for certain sites (prima). This adds to my lack of record keeping. I used to go by the 'every x buyins withdrawal method'. So if I just give the accountant a + number and nothing else, when it gets reported and filed is that suspicious?
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  #4  
Old 10-31-2005, 12:39 AM
BottlesOf BottlesOf is offline
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Default Re: yes another TAX question....

Yes. It depends on the number and a host of other things, but you can't just give your net winnings unless you are filing as a professional, which you probably don't want to do as it adds complications.

Why would you not import certain sites or certain limits? Start.
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  #5  
Old 10-31-2005, 12:44 AM
AZK AZK is offline
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Default Re: yes another TAX question....

[ QUOTE ]

Why would you not import certain sites or certain limits? Start.

[/ QUOTE ]

Some sites don't support it/don't make it worth the effort for the time it takes/or sometimes it's just pointless for a certain game.

What do I do in my curren situation, being that I have somewhere between 0 and 0 records and just a chunk of cash.
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  #6  
Old 10-31-2005, 12:48 AM
BottlesOf BottlesOf is offline
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Default Re: yes another TAX question....

[ QUOTE ]
You are supposed to provide a good faith estimate of wins and losses, and indicate it's an estimate. Your "wins" are the sum of all winning sessions, and "losses" are the sum of all losing sessions. How "sessions" are defined is a little murky, but you should just try your best based on your results.

[/ QUOTE ]
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  #7  
Old 10-31-2005, 02:07 AM
TheHammer24 TheHammer24 is offline
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Default Re: yes another TAX question....



[ QUOTE ]
I didn't want to give him a number that included money on say party because I didn't think it was taxable until I withdrew it from site.

[/ QUOTE ]

It's taxable as soon as your session ends, but it is very difficult and not worth IRS' time to figure this out. It is rather easy, however, to figure out what you have withdrawn from the site. As a result, people can most likely "get away" with only reporting what they withdrawal into US accounts. However, unless you plan on losing the money, or permanetly keeping it in cyberspace, you are going to have to pay taxes on it eventually.

I think your accountant is trying to tell you it would be best to not report your full winnings, but that's just my opinion.
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  #8  
Old 10-31-2005, 10:29 AM
AZK AZK is offline
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Default Re: yes another TAX question....

I have saved every email that has gone between bank account, firepay/neteller, and poker site, so if I had to produce records I suppose I could, but it would be ugly.
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  #9  
Old 10-31-2005, 10:58 AM
BottlesOf BottlesOf is offline
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Default Re: yes another TAX question....

Hopefully/probably you will never have to. My personal belief is to strive to be in as full compliance as possible within reason, just in case.
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  #10  
Old 10-31-2005, 12:08 PM
iceman5 iceman5 is offline
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Default Re: yes another TAX question....

If you come up with a good answer, let me know because I have the same problem. Heres how I see it.

1) I dont know exactly what I owe and neither does the IRS, but I want to pay my taxes
2) The IRS most likely would never know about my winnings if I didnt report them, so Im quite sure there wont be a problem with NOT reporting winnings that arent withdrawn yet even though legally they should be reported.
3) When it comes to breaking down wins and losses, there is no clear cut clarifiaction on what a session is when youre online. You could report daily results and call them a session, but why not do it weekly, or monthly? Remember that the IRS doesnt even know youre playing and winning. My personal opinion is that at least 90% of people dont report at all. I have no 1099s. As far as I know, my responsibility is to pay my taxes as truthfully as possible. There is no law saying that I have to keep a spreadsheet of every session I play or my results for every day. I dont have to use PT by law. If I didnt keep any records, the only thing I would know (and the only thing the IRS could prove) would be the deposits going into my bank account from Neteller.

So lets assume that I have no records. Lets assume that I have deposits into my account totaling $80K for the year. Couldnt I just report the $80K as winnings? I know that Im suppossed to seperate wins and losses, but since I have no records (and there is no law requiring me to keep records), what can the IRS do about my reporting my winnings with no losses reported? Would they really care? There is no place to report HOW you won the money. It could be $80K in lottery winnings, so would they even question it?

Like I said , Im trying to do whats right and pay my taxes, but they make it pretty tough to do correctly.
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