Sigh... I think so... (Ctrl + F > poker > 0 results...)

so we're officially drawing dead?

We were dealt 72o and played it like we had TT only to realize we were only rail birding the whole time. Our only savin grace is that we are EV+ in the game long term.

I think the fiscal cliff deal just hurt amateur mid stakes and higher players real bad given the limitations on deductions imposed. Might turn mid stakes and higher games into pro only shows.

Sure, but it's not like States didn't object to other forms of eCommerce when it began, it's just that courts firmly opposed government interference of inter-state/national commerce - with one of the very few exceptions being the allowance that a State's right to regulate gambling (for age restriction and compulsive gambling control, etc) is equally deserving the court's protection as businesses right to market access.

That's where the 'smart' idea to convince courts that poker isn't gambling came from, but since the definition of what is or isn't gambling is determined by the State, that idea clearly wasn't thought all the way through.

If States could have interfered with eCommerce, many of them surely would have, what should be tough to wrap the head around is that there are localities in this and other countries where an adult can't even buy a Playboy magazine, but a ten year old kid can freely download xxx porn because of court protected 'freedom of expression'.

If average Joe really thinks about it, the State government is like a parent and the courts are telling that parent that they have a right to keep gambling out of their 'home', which in my mind makes more sense than some of the areas the courts tell the 'parents' they don't have the right to interfere.

Even harder to comprehend is the decisions some 'parents' like Washington State make; "Go ahead and smoke and grow pot, just don't let me catch you playing online poker!", or Nevada, a State which allows whorehouses and gambling almost everywhere, became the first State to make it crime in 1997 to gamble online.

Perhaps the Constitution should have included a Bad Parenting Clause.

Which limitations are you referring to? I'm aware of the 3.8% Obamacare surtax on investment (not poker) income for individuals with gross income above ~250k (triggered by amateur poker phantom income) but that's all I knew about for 2013 changes...what changed with deductions? Thanks and sorry for the small derail.

You can do better than that.

http://www.dumblaws.com/laws/united-states/arkansas

Limits on itemized deductions will kick in for AGI of $250K+.

Right, and I've been trying to find details on the new rules with no luck, but existing federal limits and restrictions on deductions exempt gambling losses (to the extent of gambling winnings), right? Has anyone seen specific cause for concern that gambling losses would be included here?

Edit: though amateur poker players losing their non-poker deductions is fairly terrible too

Here is the bill text:
http://thomas.loc.gov/cgi-bin/query/.../~c112jMDhSN::

Here is the text of the bill regarding phaseout of itemized deductions and personal exemptions (amending The Economic Growth and Tax Relief Reconciliation Act of 2001):

Sorry I'm really stupid, what does that even mean, and how does it "turn mid stakes and higher games into pro only shows".

Amateurs have to report gross wins and losses by sessions. That can get into six figures quick if they multitable mid stakes games. This limits their ability to deduct the losses. So a losing player with 500k of wins and 600k of losses or w/e might now have a nice tax bill to boot as they can't deduct losing sessions. Can't see a lot of weak amateurs continuing to play under those rules.

Today most players simply ignore the tax law. It will be a problem for players on regulated sites once full compliance with tax laws are enforced.

Amateur players are required to report all their gross poker session winnings as gambling winnings under Misc. Income on their IRS Form 1040. Total gross session losses are taken as an Itemized Deduction on Schedule A. (See the US Taxes sticky in this forum for more details.) Professional players instead report winnings and losses on a Schedule C, and the net figure is carried over as Business Profit onto the Form 1040.

So, for amateur players, their Adjusted Gross Income figure includes their total winning sessions and their losing sessions are taken as a deduction later on the 1040. This sets up a situation where mid- and higher- stakes player can easily exceed the $250K threshold where itemized deductions are limited, and therefore may not be able to take some or all of their losing sessions as deductions.

For instance, if an amateur player plays $50/100 NLHE every weekend, and averages eight sessions per month with variation of average $10K wins/losses, the player could have $265K in winning sessions and $250K in losing sessions for the year. Without a deduction limit, the player reports $265K gambling income and takes an itemized deduction for $250K gambling losses. With the deduction limit, he may not be able to take the full (or any) itemized deduction for losing sessions, thereby artificially inflating his net gambling profit and thereby increasing the income taxes he pays on his poker winnings, conceivably even beyond the actual amount of his net profit. It could also easily lead to a situation where a player has a net loss from play for the year, but still owes significant income tax on artificial profit due to the limits on their itemized deductions. This problem is magnified for online players, who tend to have much higher gross figures due to more sessions of play.

Laymans

Win a million today
Drop a million tomorrow
Still owe the IRS money on the 3rd day for 750k in wins.

oh no, that makes no sense though

Ha! Who knew poker players would get screwed in the lame duck. We were supposed to have a free-roll.

This issue deserves its own thread IMO.

Agree. But LG and PX, are we sure this language applies to gambling losses, as per my prior post? Havent tried to look up the act it modifies yet, but it appears to replace some existing threshold, perhaps which exempted gambling losses.

If this is the case, you'd think it would be in the best interest of the states pursuing gambling legislation to have this clarified or amended.

Is this an opportunity in disguise?

Will this also negatively effect casino/Vegas high rollers? If so, perhaps we can get a change in the tax code where amateurs can net also. (?)

And yes, this deserves its own thread.

cantor doesn't want to go forward on the fiscal cliff deal that passed the senate by landslide at 2am this morning.

could he force some amendments and a trip back to Reid for conference committee??

Here's another thread on the tax issue. I looked into the details of the Internal Revenue Code sections modified and it is my layman's reading that gambling losses ARE indeed exempt deductions here, meaning that the horror scenarios described above should not be a concern. But I'd feel a lot better about it if other smart people read through it and agreed with me!

http://forumserver.twoplustwo.com/57...ayers-1283837/

Those are dumber laws, the examples I gave weren't really 'dumb' at all though, they are arguably very 'smart' market protective online gambling laws designed to protect local commercial or Tribal interests - but implemented under the ruse of 'consumer protection/moral opposition'.

States like Utah and Texas get the most flack on this forum, but at least those States have a consistent moral opposition towards commercial poker, States like WA and NV which already whore their consumers out to B&M gambling stakeholders should be stripped of their 'right' to feign family values concern when passing legislation that keeps adults from the cam-sex equivalent of playing poker on out-state internet sites.

In the Cabazon ruling which led to IGRA (Tribal gaming), SCOTUS essentially ruled that States could not be hypocritical 'parents' towards extraterritorially regulated gambling operations, yet in Russo SCOWA ruled that internet poker had sufficiently unique concerns from it's B&M equivalent to allow a hypocritical prohibition.

It has since been assumed that when States move to fill the internet gaming space that their markets will be protected by the courts, making State lottery authorizations of online poker something to be feared, but intrastate poker commerce isn't protected by Federal lottery laws.

So precedent would seem to indicate the opposite, once States allow online poker themselves, the courts should be expected to invoke the Cabazon 'Hypocritical Parent' Clause to either forbid market barriers, force States to negotiate reciprocity, or pressure Congress to pass legislation.

Yeah looks like you are right, thanks for the legwork, it's appreciated.

Happy to help figure it out, thanks for bringing it to my attention. I have no doubt that this type of tax change, in general, could completely neglect a proper/rational exemption for gambling losses to the extent of gambling winnings (intentionally or unintentionally). Perhaps we were only saved this time by the fact that this was merely a redefinition or shift of an existing threshold.