Fiscal cliff deal may make poker impossible game for recreational players - Page 2 - Poker Legislation

I read this thread and tried to understand as best I could. You guys are only talking about poker right? I'm guessing though that this would apply to all form of gambling in the IRS's eyes? Say I make 250K+ and I like to play the 25$ VP. Am I gonna have to start filing as a gambler, move out of country, or quit gambling, because I can't deduct my losses from my G-forms?

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01-08-2013 , 10:56 PM

#27

LT22

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All gambling is treated the same for tax purposes

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01-09-2013 , 07:50 AM

#28

PokerXanadu

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Quote:

Originally Posted by spoonfox

No, you don't have to move out of country. You will continue to be able to deduct your losses. However, you may lose part or most of your other itemized deductions, depending on your total Adjusted Gross Income. This may result in an increase in your income taxes in the range of 1%-2% of your gross gambling winnings. (This does not take into account the AMT, which might kick in as well depending on your overall tax situation.)

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01-09-2013 , 09:19 PM

#29

repulse

veteran

Join Date: Jul 2006 Posts: 3,070

I stumbled upon mention of a nuance of the Pease provision that I would like to understand better. From this article:

Quote:

There is one caveat, which applies to high-income taxpayers whose itemized deductions are extremely small relative to their incomes. If the aforementioned couple’s contributions, taxes, mortgage interest, and certain other deductions had been less than $18,750, then Pease would have used a different formula to compute the extra taxable amount — that formula actually would have reduced the couple’s incentive to claim additional deductions. But, high-income taxpayers with such small deductions are few and far between.

"Few and far between" in the real world, sure, but I imagine that many amateur poker players who trigger the AGI for Pease will have (relatively low actual income and thus) relatively low nongambling itemized deductions.

As best as I can determine, the portion of the internal revenue code relating to the Pease provision doesn't treat any small-deduction cases.

Any tax wizards know what the author might be referring to? I've also emailed the editor to attempt to inquire with the author.

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01-10-2013 , 12:13 PM

#30

EMc

EVP of Threads and GM

Join Date: Feb 2005 Posts: 13,479

I dont know where he got that from but in reading the current code section I fail to see where he got that from.

There is no mention of such, it might be in a revenue ruling or procedures but i am not seeing it.

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01-10-2013 , 01:13 PM

#31

pixelpusher

adept

Join Date: Jul 2009 Posts: 773

Quote:

Originally Posted by Russ Fox

Note that this only relates to federal income tax. Residents of the wrong states (some states do not allow gambling losses as an itemized deduction) have issues with their state income tax.

-- Russ Fox

Can you list the states in which gambling losses are not deductible?

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01-10-2013 , 01:19 PM

#32

repulse

veteran

Join Date: Jul 2006 Posts: 3,070

Quote:

Originally Posted by pixelpusher

Can you list the states in which gambling losses are not deductible?

http://www.taxabletalk.com/2011/01/0...onal-gamblers/

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01-10-2013 , 03:23 PM

#33

Russ Fox

tax practitioner

Join Date: Jun 2004 Posts: 884

This is a much more current list of bad states for gamblers.

-- Russ Fox

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01-10-2013 , 03:31 PM

#34

repulse

veteran

Join Date: Jul 2006 Posts: 3,070

Thanks Russ. I'll make sure it gets updated in the sticky here later this year, too.

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01-10-2013 , 03:35 PM

#35

PokerXanadu

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Quote:

Originally Posted by repulse

Thanks Russ. I'll make sure it gets updated in the sticky here later this year, too.

Updated.

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01-10-2013 , 04:31 PM

#36

repulse

veteran

Join Date: Jul 2006 Posts: 3,070

Quote:

Originally Posted by PokerXanadu

Updated.

Thanks!

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01-16-2013 , 07:51 PM

#37

repulse

veteran

Join Date: Jul 2006 Posts: 3,070

I incorporated the new 2013 changes into my cash game tax planning calculator spreadsheet, as has been linked in the tax sticky. The new version and a brief look at some of the potential impact of the new rules is available here:

http://www.quantitativepoker.com/201...ator-2013.html

Thanks to those in this thread who have been helpful in getting the new rules figured out.

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