I am also curious how the tax reporting will work. Will forms be submitted based on cashouts, or cashing in tournaments? In the past it was already very complicated, will the regulated sites simplify the procesS?

We'll adhere to whatever the US gov't requires, but we are attempting to structure our payouts so that there won't be withholding or gaming forms (W2G) sent to the IRS needlessly.

There's a complex matrix of what "trigger conditions" require which forms to send. For example, a visiting (non-American) player wins more than $600 in a freeroll using promotional money - that's a 1099. Player wins more than $5000 and 300 times the buyin - that's a W2G.

Basically, our tournaments are a tiny bit flatter at the top (we're talking like 0.5% when a tournament field hits 500 people or more) to avoid these conditions.

We'll adhere to whatever the US gov't requires, but we are attempting to structure our payouts so that there won't be withholding or gaming forms (W2G) sent to the IRS needlessly.

There's a complex matrix of what "trigger conditions" require which forms to send. For example, a visiting (non-American) player wins more than $600 in a freeroll using promotional money - that's a 1099. Player wins more than $5000 and 300 times the buyin - that's a W2G.

Basically, our tournaments are a tiny bit flatter at the top (we're talking like 0.5% when a tournament field hits 500 people or more) to avoid these conditions.

This is a great day as a Las Vegas resident! Another reason why I will continue to live in Nevada in addition to cheap rent, being able to own all the guns I want, and having no state income tax.

On a more serious not I have a question that I did not see addressed yet as I have skimmed the thread, but I have not read the entire thread so I might have missed it being addressed already. Since this site is going to be regulated by the Nevada Gaming Commission, does that mean that "gaming" crimes committed on the site or the breaking of the TOC's (such as multi-accounting, collusion, etc.) will be felony crimes? I believe that all gaming crimes in the state are felony crimes if I am correct. Does this mean the crimes on this online poker site will be no different? I feel like this is a serious question/issue that should be addressed if not been already. Thanks

Are winnings from foreign accounts while playing in Nevada subject to Withholding Tax in the US?

If I win $100k at the WSOP in Vegas, they automatically withhold 30% for tax when I cash out. (Even though gambling winnings are not taxed in my country)

So, If I win $100k on Ultimate Poker while in Vegas, will you automatically hold 30% for tax when I try to cashout?

depends on your country, most countries have tax treaties with the US and in that case they can't withhold.

Where are u from?

If ur from EU u should be ok and any other country that has decent relations with US.

If you win the a tournament for over $5,000 as a foreign player from a non-tax treaty country, Ultimate Poker will withhold 30%.

Scott

I think all withdrawals at casino cage will be via check. Wether you can the cash that check at the cage I do not know. Pretty obvious you can bring it straight to your bank and then responsibility for tax payments is like normal.

My best guess:
For financial transactions, remember that money laundering is a huge concern of the state and feds. The transaction policies will reflect this. And with internet gambling under intense scrutiny, the regulations will probably be more stringent than B&M. Win a tournament over a certain amount (1.5k, 4k I don't know I don't play tournaments) expect paperwork and withholding. Withdraw cash over a certain amount, paperwork. Electronic movements over a certain amount, irs notice. It's just going to happen in a regulated environment.

As for regular taxes, no income tax in Nevada,

Actually, I think you will be able to take it in cash, check, or wire.

Anyone in the know please answer:

I look at account statement and so far it shows Money won $205.57, Money wagered $192.59. When subtracting money wagered from Money won = $12.98.

That is the exact amount that I am up so far(except a small sit n go which is not included for some reason).

My question is, is this the kind of info that will be reported to IRS automatically and a statement given to me at end of year?

So that would mean so far I have:
$205.57 in income for my taxes even tho I am only up $12.98?

That is after only 1 day playing small stakes, multiply by 365 and would be 75k in income showing even tho I only won $4737.

Are you sure about that, normally only if you file as professional gambler can you net your wins and then you would have to pay 15% self employment tax on top of any taxes.

normally gambling is, all winning sessions is income on your form and then you can either use standard deduction or deduct all losing sessions for someone not filing as professional gambler.

Which means you will forgo your standard deduction and be paying more tax than you should. The way it looks in my statement so far that looks like what is going to happen.

That's what I read about it. No one would play poker otherwise.

Ultimate Poker will report to the IRS when a player has won $5,000+ in a single tournament. This will only happen in the large Sunday tourneys or a satellite to a $5,000+ live event.

Scott

So any cash game wins will not be reported no matter how big and will be on each player to report anything to IRS?

Correct

Quit worrying about IRS and pay your taxes! Never worth screwing with IRS

Nit. This attitude is what's wrong with our world. Screw em every chance you get I say. (disclaimer: I would never personally screw em)

I would imagine that the IRS would be able to audit your play pretty easily even if it is not directly reported to them.

We won't be using this information as a "triggering event" to send the IRS at this time. Right now, as Scotty mentioned, it's just tournaments of certain sizes and buyins (for certain people). This might change, and I'm certainly not a tax expert, so always pay your taxes according to your local laws.

Asking about taxes IS trying not to screw with the IRS. The other poster that mentioned that the site would be netting the difference is far off what is accepted by the IRS today, and if you submitted your taxes that way you'd get screwed.

If you file as professional gambler then yes you can net, but you will be paying self employment tax of 15% in addition to taxes.

If not then you cant net. All winning sessions go as income and then you either deduct all losing sessions OR standard deduction, not both.

That how yours supposed to do it even for cash games in a casino, however there is no record of that play unless you make deposits, etc. but this new online regulated poker, there is records!

The IRS taxes gamblers by session. If you play roulette (or poker) and win $10,000 today and then lose $10,000 the next day, your tax liability is not $0. You have $10,000 in income and $10,000 in loses. That's not the same as saying you won $10,000 and lost $10,000 the same session. Your AGI will be inflated due to your winning sessions.

If you are a professional gambler, then you would net on schedule c and deduct expenses.

I'm saying just net it anyway. What's the worst that could happen. Seriously?

You underpay your tax liability and look to pay huge penalties and interest perhaps years later when they catch up to you. You think guys that owe the IRS $100K, started with a $100K debt to the IRS? Penalties and compounding interest *for years* will crush you.

Oh, and since you now know you're not supposed to net, you could face possible jail time for tax evasion.

Just those little pesky things, but do what you like.