Rake pales by comparison.

You can file as a professional gambler if you meet the conditions set by the IRS. This will enable you to deduct expenses such as air travel, rooms, meals. A fairer way to tax would be to allow the player to income average over a 3 year period. This way if you had two losing years playing tournament poker you could take those losses off from the winning year. Gambling for a living is really treated harshly by the IRS. The fact that you can be a net loser after 5 years and paying taxes on the year you got lucky seems a bit inequitable. It does no good to complain. The IRS tells you to find another profession. I don't know if this is still the case but NY use to not permit you to write off gambling losses against gambling winnings. If you played slots and video poker like Chainsaw NY made you pay taxes on your taxable jackpots and not let you write off the losses. I could be wrong on this but I believe this was the case around 1999-2001.

The point is that he has to file a New Jersey tax return. Bolding something doesn't change that.

I think we would all agree that he was a resident of NJ in 2017 for tax purposes at least up until he went to NV for the WSOP.

As I believe you have previously stated, even if he does not return to NJ, that does not necessarily mean that he was not a resident of NJ for tax purposes for the remainder of 2017.

A court could still find his domicile to be in NJ for the remainder of 2017 (and I am assuming that he spent at least 30 days in NJ, so if the court finds that, then he would be a resident of NJ for tax purposes in 2017). As I believe you also stated, domicile is sometimes stated as "being where your heart is." It is a principal and permanent home where one intends to continue to live indefinitely. It is a facts test. Even if he doesn't return to NJ, I am guessing there are a number of facts that would go against him.

One of which was having a NJ Will. You are correct that a Will is not necessarily subject to the laws of, or administered, in the state in which the testator was residing at the time of execution. Rather it would be subject to the laws of, and administration, in the state in which the testator is domiciled at the time of his death. However, most Wills contain a statement that the testator resides at a certain address or at least a county and state. Further, there may be provisions in a Will that are fairly state specific due to tax laws or other laws of the state or other circumstances. Now, this would not be dispositive as to the domicile of a person. One can execute a Will and then later change his domicile (although due to the varying laws of states, it probably is a good idea to re-look at your Wills, powers of attorney and other estate planning documents if you move to a new state). But this is just one fact that I mentioned that may currently go against him. It may have actually been the weakest one.

Some other facts that could go against him (and I do not know him, so I have no idea what of these facts are true and what are not, but thy are reasonable facts that a lot of people in his circumstance would have) and help a court reach a determination that for the remainder of 2017 his domicile was still NJ:

--He has a permanent home in NJ.
--He has a NJ driver's license and a car registered in NJ.
--He has family in NJ; not NV. (If he has a second cousin who lives somewhere in NJ, then this probably doesn't really matter. But if he has a wife and/or kids living back at the house in NJ, then this is probably going to hurt [especially if the kids are enrolled in school in NJ]. And things in between.)
--He has paid estimated tax to NJ for the year and/or had wages withheld and paid to NJ for the year.
--Has employment in NJ (he may not; I don't know if he is a professional poker player).
--He registered and/or voted in NJ; he has not changed his voting registration to NV.
--He purchased round trip airplane tickets to NV to return to NJ.
--He has gone to NV to play in the WSOP in prior years and previously always returned to NJ (I'm guessing).
--Bank accounts/security deposit boxes at branches in NJ; not NV.
--Primary physician located in NJ; not NV
--NRS 41.191 provides for a person to file a statement declaring his domicile to be a certain county in NV. I am assuming that he did not do this before winning the money (again, like everything else, this is not dispositive, but it would have been helpful if he did it and is the opposite, if he did not).

So none of the above is dispositive, but they can all be facts that imply that he really did intend to return to NJ and didn't really intend to change his domicile to NV. Plus everyone would know what he is doing. He just won a lot of money and would owe around $900,000 in taxes if he were a New Jersey resident at the time. A court probably won't be sympathetic to him then trying to argue that he changed his domicile slightly before having won that money. Perhaps it could be that he actually decided to change his domicile from NJ to NV immediately after he won the $10,000,000 rather than slightly before.



Plus, even if he did change his domicile from NJ to NV slightly before winning the $10,000,000, he could still possibly be a resident of NJ for tax purposes for the remainder of 2017:


I don't know when he went to NV, but it is likely around the halfway mark of the year. He may have already spent 183 days in NJ and maintained a permanent place of abode in NJ. If so, then it may not even matter if he changed his domicile to NV before winning the $10,000,000; he would be a resident of NJ for tax purposes for 2017. I do not know if this is effected at all if he disposes of his permanent place of abode in NJ during the year after having already spent 183 days in NJ.



I just think that he would be unlikely to win this argument in court (but also as stated, I don't know him so I really don't know exactly what facts are applicable to his situation). But if he is going to try to win this argument, he should probably not return to NJ as you say and do the following asap:

1. Sell his house or surrender his lease in NJ.
2. Buy a house or get a long term lease in NV (length as customary for residential renters - probably at least a year).
3. Surrender his NJ driver's license and get a NV driver's license.
4. Re-register his car in NV or dispose of it so it isn't registered to him in NJ anymore.
5. Register to vote in NV.
6. Move the family out to NV and get the kids enrolled in school there (if he has a wife and/or kids).
7. Move his bank accounts to NV.
8. Basically anything else that he was doing in NJ, move to NV to set up a life in NV.
9. I am not sure whether, at this time after the money is won, filing the statement declaring his domicile to be NV would be helpful or hurtful.


And, of course, doing any of the above would not be dispositive.



Disclaimer: I'm not doing any proper research on this.

Also:


***DISCLAIMER: I AM NOT SCOTT BLUMSTEIN'S ATTORNEY. I AM NOT MAKING THIS OR ANY OTHER POST IN THIS THREAD AS ANYONE ELSE'S ATTORNEY. THIS IS NOT LEGAL ADVICE FOR SCOTT BLUMSTEIN OR ANYONE ELSE. IF ANYONE WANTS TO CHANGE THEIR DOMICILE FOR TAX OR OTHER REASONS, SUCH PERSON SHOULD COLNSULT WITH APPROPRIATE COUNSEL.


You have said "US Constitution" a few times. I'm not sure what part of the US Constitution you are referring to as being relevant in determining whether one is a NJ resident for NJ income tax purposes.


That couldn't hurt. But the house or condo is probably a month or two lease and maybe with a bunch of guys who are all their for the purpose of playing in the WSOP and then going back home and it may be exactly what he did the last several years.

I don't think that would be too helpful with establishing that he changed his domicile from NV to NJ, so he could still be caught there. However, if he can somehow establish such change in domicile and these are the facts, then paragraph 2 of the following may not catch him:

So can you get a tax rebate on gambling losses in America?

He has to file a NJ resident income tax return because he was a resident of NJ for part of the year, but he only has to report the income and pay tax on the income that he earned during the part of the year that he was a resident of NJ. If he ceased being a resident of NJ prior to winning the $10,000,000, then he does not need to report the $10,000,000 on the return he files or pay tax on it. No one cares about having to file a return; it is about whether the $10,000,000 would have to be included on the return and tax paid on it.

Disclaimer: I can't say for 100% that the above is completely correct, but I think it is. I am not going to look for authority for it other than what I already posted and will repost below, which is just a statement on the NJ Division of Taxation's website. You can look through the statutes if you want of course.

Not sure about poker, but if you play lottery games you can write a percentage off your taxes and get some of the money back.

Exactly how you do it depends on whether you are filing as a professional or an amateur. However, in general you can deduct gambling losses against gambling wins that occur in the same year, but can't go below 0. But for amateurs to do this they need to forgo the standard deduction and itemized their deductions.


EDIT:

I was assuming American citizen/resident also. If not, then it may be different and may depend on whether your country has an income tax treaty with America.

thats not too bad then...

American taxation on poker winnings is a crime. A big part of the reason I gave up playing for a living.

It goes like this.... make some money (pay taxes on it). invest it in poker (pay TONS of rake), withdraw profit (pay 40% to the gov), buy things (pay sales tax).

It makes ZERO sense to me that two adults, using their own money that they have already paid tax on, can flip a coin between each other for $100 and then the winner has to give a chunk of their $50 profit to the government. Meanwhile, we don't even have universal healthcare.

Sort of unrelated, but how many of you have ever worked 1099 as a contractor? I had always worked for a company/firm, but several years ago I hit out on my own and began working as an independent contractor. It was incredibly eye opening to see just how much I needed to pay in taxes, especially since I now needed to cover my own FICA taxes (in other words, as an IC I now had to pay MORE in taxes than when I worked at the company/firm). Had I not listened to the advice of a family member, and immediately visited an accountant, I would have possibly been destroyed financially. Not "right away" so to speak, but by not paying enough for several years and then getting a letter in the mailbox from the IRS 3-4 years down the road telling me I had been under reporting for years. I usually don't listen to family members about such things as I'm pig headed, but boy did I luck out listening to them this time. The accountant set me straight right away, and I averted what would have been sure disaster.

Anybody who works on their own, or who is just starting out after having worked 1040 their whole lives, should definitely enlist the help of an accountant/tax professional immediately. I'd do so even before your first quarterly payment is due.

Only on federal taxes. You owe the state on all winnings , at least in Illinois. So if you win a million and then lose all million back, you still owe the state $50,000.

To clarify my quote above, I was indeed talking about federal income taxes. Each state has its own income tax system. Some allow you to deduct gambling losses, some allow you to net gambling wins and losses and report the net, some don't allow you to deduct losses at all.

New Jersey allows you to net wins and losses and report the net as income (not less than 0).

Nevada doesn't have a state income tax at all.

There are two problems with filing as an amateur:

1. Your gambling winnings are added to your gross income. This will usually be material if you are an online player, because itmeans that each table you sit at that you win is added to your winnings. You cannot net out your wins and losses even for play on the same calendar day. Even if you are a loser for the year, this can mean that your adjusted gross income is increased by hundreds of thousands of dollars which can have adverse effects.

2. To claim your gambling losses you must itemize. If you don't have other things that you itemize (such as home morgage or real estate taxes) this means you won't be able to take the standard deduction.

3. When I played online, these two items alone added thousands of dollars to my IRS liability.

How could you possibly reach that conclusion? Do you just enjoy misquoting people? I have made it EXTRAORDINARILY clear that I am referring to a hypothetical where he NEVER returns to NJ. And I believe in that case, he will never again be a resident of that State. It would be up to him to assert when that dissolution of resident status occurred.

Well, NJ can't claim that I'm a resident, because I haven't been there for the past 20 years. And what stops them from doing that is the US Constitution, the rules of which they cannot escape. I believe I have actually filed tax returns there, for clients. Nevertheless, I am beyond their jurisdiction, in any matters not included on those returns.

Your last two sentences are wrong.

And I didn't think I misquoted you. I thought you had stated the following (and I did qualify it by stating that "I believe" you said it), but maybe you didn't say it; if not, then I was wrong when I stated that "I believed" you said it (sorry about that), but the statement is true:

Even if he does not return to NJ, that does not necessarily mean that he was not a resident of NJ for tax purposes for the remainder of 2017.

The above italicized statement is correct. Just because he never returns to NJ does not mean that he gets to choose the date he ceased to be a resident of NJ for tax purposes. It is a fact and circumstances test to be weighed by the court (if it gets that far) and all the factors I mentioned come into play. He doesn't get to just say I'm never coming back (and never go back) and say that he stopped being a resident of NJ for tax purposes on whatever date he so desires to say.




(i) Your having not been in NJ for 20 years, presumably having no house there, no car registered there, not registered to vote there (but rather having all these things in some other state), etc. etc. from prior posts

is a very different situation from

(ii) Him having clearly been a resident there for at least approximately the first 5 or 6 months of 2017, been there 6 or whatever weeks ago, own a house/rent an apartment there that has been his principal home (not even have another permanent place to live at the moment), have a car registered there, be registered to vote there, basically have his entire life there right up to and actually past the day that he is trying to claim his residency in NJ for tax purposes ended because if it didn't he'd owe a high 6 figure amount in taxes (and at that point not have any of such stuff in NV, the state he is trying to claim is his state of residency).


They're not even close to comparable. Clause (i) is closer to my saying that I'm not a resident of Alaska for tax purposes since I have never been to Alaska and have no ties to Alaska than it is to his situation with NJ.

All that being said (OMG), it's the US Constitution, not all that, that prevents NJ from assessing me with a tax.

And it's the US Constitution that guarantees a poker player the right to change his State of residence, even during the final week of a poker tournament.

Cite the part of the U.S. Constitution that gives a U.S. citizen the right to travel outside a state for a few weeks, decide to not return to the state he left and declare a binding change, effective on a date of his choosing, in his state of residency for state income tax purposes upon his whim at any time he wants regardless of the factual items that I've previously described and state laws that based upon such factual items would, I think, but obviously one could argue it, and perhaps could have a different opinion, result in the state that he vacated being determined to be his state of residency for tax purposes.

years ago I thought people were lying to me when they said the WSOP ME winner only brings home 50% of his prize due to taxes


damn

Government needs money to build more roads n stuff

Is the IRS requiring poker players to file as professionals so they are required to contribute to FICA (Social Security)? That would then be an addition 12.4% tax for the first 125K.

State laws cannot violate the US Constitution. It is not my job to educate you about my Constitutional Rights, especially when you hold them in such obvious contempt.

Start here:

https://en.wikipedia.org/wiki/Comptr...yland_v._Wynne

Kinda expected you might say something like that.

You are correct that state laws cannot violate the U.S. Constitution.

However, there is no citation to the U.S. Constitution and no case law interpreting the U.S. Constitution that provides for the following:

I'll be absolutely shocked if somebody can post any such citation or case law.




You linked to a Wikipedia page about a 2015 U.S. Supreme Court case. The first line of that Wikipedia page is:

The case is obviously not even remotely related to how to establish residency for purposes of state income taxes.

Maryland was apparently charging its residents state income tax and county income tax on income earned in other states and while it allowed a credit against its state income tax for income tax paid on such income to another state, it did not allow such credit against its county income tax. This was found to be unconstitutional and the ruling was that a credit must be allowed for income tax paid to other states on both Maryland's state income tax and county income tax that was based on such income that was earned in other states.

So as I stated above, this case you cited to obviously has nothing to do with determining state of residency for purposes of state income tax. And Nevada doesn't have an income tax. So even if we got to this point, this case would not be relevant because Nevada wouldn't charge any tax on the income from winning the WSOP ME and, therefore, there would be no Nevada tax that NJ would be required to give a credit for.





Thanks for the trolling though. It was kinda entertaining and gave me some sort of a reason to think about an issue that I never really deal with much. Feel free to throw out another case that has something to do with rules dealing with issues involving multiple states and income taxes, but doesn't really have anything to do at all with establishing state of residency for the purpose of state income taxes.

Whether a poker player should file as a professional or an amateur would depend on that particular poker player's circumstances.

I had heard that in the last few years the IRS tried to claim that more people who filed as an amateur should file as a professional; presumably for this exact reason.

If you really try to search (maybe the Poker Legislation Forum primarily) I do recall a few threads where people here had the IRS challenge their tax return because the IRS asserted that they should have filed as a professional rather than as an amateur.

You are making of fool of yourself in this thread.