First year of doing my taxes myself, and am confused about my poker winnings.

I have a full time job, and made some money from poker, so I am filling as an amateur. I'm confused because I have been staked the whole year, so haven't actually had "losses." If I am only issued money once a month when I win how do I claim this?

IRC § 165(d) states that “losses from wagering transactions shall be allowed only to the extent of the gains from such transactions” but does not provide a technical definition of the terms “gains” and “losses.” As AM 2008-011 explains, the term “transactions” in section 165(d) could mean every single play in a game of chance or every wager made. That interpretation would require a taxpayer to calculate the gain or loss on every transaction separately and treat every play or wager as a taxable event and also to trace and recompute the basis through all transactions to calculate the result of each play or wager.

Because that method would be “unduly burdensome,” the IRS legal memo allows a casual gambler to recognize a wagering gain or loss at the time he or she redeems tokens.

sounds like from this because I only actually get a redemption once a month I could just net those payouts.

If I am wrong about this, how am I actually supposed to calculate wins and losses when I only get a % of the wins at the end of the month?

This is something that is not at all settled IMO, assuming you're referring to cash game staking (or long-term tournament staking with makeup).

One-off (i.e. non-long-term) tournament staking is pretty clear; the wins/losses are allocated between the player and the backer in accordance with their contract (discussed in the tax sticky). The idea here is that when you've got backers or stakers, the gambling wins and losses are realized by them, rather than by you with your settling up with them being a distinct event. Note though, that this treatment of one-off contracts still has both the player and the backer realizing sessions with the same frequency they would if there were no backing.

To make this analogous to a long-term contract, let's say one where you play every day with someone else's money and only settle wins/losses with monthly payouts, you might argue that you'd just only realize a win or loss once per month during this settling. (And this is what I'd personally do if I were in this situation, though I'd want to check with my tax professional.)

However, there may be issues with this, as entering such a long-term contract could, under some conditions, just be seen as a way to allow an amateur player to net sessions. Example being if you were to "back" me by providing me money to play with, but having me keep 99.9% of winnings and eventually owe you 99.9% of losses on a monthly (or even less frequent) basis. I'd effectively get the same EV from my year of play that I would unbacked, but I'd get to lump it all into one session. It may be seen as an artificial way to delay realization of wins and losses.

So there is a potential exploit here if it were to be the case that long-term backing deals lead an amateur to only realize sessions on the dates of settlement. I've never read anything about this and I doubt there is any real of implied IRS precedent, they're probably not even aware of this possibility. I don't know that I'd want to be the test case, but I also don't know if this is really worth worrying about.

I was just reminded that apparently I started a thread about this sort of thing a few years ago:

http://forumserver.twoplustwo.com/57...income-733555/

Discussion never really took off.