Quote:
Originally Posted by SimpleRick
Even if he did lose all the money gambling on sports you still have to report the winnings from poker and the losses from sports betting.
Yeah but how do you know you didn't? You report a million in wins, a million in losses, and it costs you almost nothing (you miss out on some deductions because your top-line income is too high)
If you reported it wrong, but the difference between what you owed and what you paid is almost nothing, the IRS may come after you for the difference, plus some penalties.
The reality is that almost every gambler is a losing player, even though they book some wins. Almost no one reports it correctly. Actually reporting it correctly requires a level of record-keeping that almost no gambler does (think of the average slot player, not a pro poker player). They report their total W2Gs as total wins, and report equal amounts of losses. That's wrong, but the IRS doesn't care, because the end result is almost the same. The right way to do it is to report the results of each session. So if you put $100 into a slot machine and cash out $200, you need to report a win of $100. Then if you move to the adjacent slot machine, put in your $200 ticket, play a bit, and cash out $50, you need to report a loss of $150. If you are bouncing from machine to machine, each one of those needs to be a line item in your records. You see people doing this all the time in casinos -- what you don't see is them carrying a notebook and keeping track of each of these. Again, the IRS doesn't care.
Now if you are actually a big winner and you report nothing, then they care.