Taxes & corporations

[cardcounter0]

You need in the 90K range of gambling income for it to make sense to form a corporation, unless you have an unusual amount of expenses you can write off.

Talk to a CPA, corporations are formed for all types of activities every day.

[j0n_blayze]

Illegal? Untaxable? I don't understand?

[astroglide]

recreational: report all wins separately. this bumps up your adjusted gross income. deduct all losses separately in a different section. no writeoffs, no self-employment taxes.

professional: report the sum of all wins and losses together. allows writeoffs, requires self-employment taxes.

the angle people commonly try to shoot here is to make an s-corporation or llc (which passes taxes through to the individual), claiming that "their business is gambling" so that they can lump theirs wins and losses together without paying self-employment tax. it's illegal. as such, there is no legal advantage to forming a corporation as it pertains to gambling income.

[cowboyzfan]

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internet gambling is illegal all over the usa too. neat huh?

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when was this determined? was there a new ruling?

[astroglide]

some states explicitly ban it, most states prohibit unsanctioned gambling

[RYL]

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A CPA's fees are like the rake: very signficant when the stakes are low but negligible when the stakes are high.

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That is such an awesome comment.

[PokerSlut]

Just because you earn money from an illegal venture does not make it non-taxable. Drug dealers, etc. can avoid the penatlies for tax evasion just by listing the income gained from dealing and paying the appropriate amount to the IRS. Also, paying taxes for illegal activities does not incriminate you.

[Kurn, son of Mogh]

internet gambling is illegal all over the usa too.

This is absolutely not true. Gambling in the US is regulated by the states. In most US States, internet gambling is *not* illegal.

[Kurn, son of Mogh]

most states prohibit unsanctioned gambling

Most state laws sanction the people who *run* the game in their state, not the players. Huge difference.

[astroglide]

at what point did i say anything opposite of that?