made money in 2007/2008, none in 2009 - Poker Legislation

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made money in 2007/2008, none in 2009

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02-11-2010 , 06:45 PM

wood_wall

banned

Join Date: Dec 2009 Posts: 292

hey guys,

I made money strictly from poker in 07 and 08. I paid a pretty good sum of money in taxes for those years. I had my worse year ever in 2009 and actually lost money. I had no other income (luckily I'm not a big spender and was able to survive comfortably off of my profits from the prior years).

my question is, do I still have to file taxes this year? do I have to fill out the exact same paperwork but just put 0 for the income? i think it'll look pretty shady if I just don't send anything in after paying in the past years.

thanks!

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02-11-2010 , 06:50 PM

Rich Muny

Former PPA VP

Join Date: Apr 2005 Posts: 28,525

If you file as a pro, you'll file zero for income. If you file as an amateur, you'll want to sum your winning sessions and losing sessions. Declare the sum of the winning sessions as income as "gambling winnings." In your itemized deductions, deduct the sum of the losing sessions, up to the amount of the sum of the winning sessions (which it what it will be in your case for 2009), as "gambling losses."

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02-11-2010 , 07:12 PM

repulse

veteran

Join Date: Jul 2006 Posts: 3,070

Is an individual with no income in a year even required to file a tax return for that year, though?

And if it is optional, would OP be wise to file anyway so as not to look shady?

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02-11-2010 , 07:23 PM

wood_wall

banned

Join Date: Dec 2009 Posts: 292

Quote:

Originally Posted by repulse

Is an individual with no income in a year even required to file a tax return for that year, though?

And if it is optional, would OP be wise to file anyway so as not to look shady?

.

ya I mean I was in college too. in the years past I've filed as an amatuer player. can't I just pretend I was simpy a college student for 2009 and gave up poker? i have plenty of college aged friends who don't have jobs so basically i'd be no different than them. ? if I do go this route, am I good to just simply not file anything?

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02-11-2010 , 07:44 PM

pianospike

adept

Join Date: Feb 2008 Posts: 1,081

If you have zero income and are not expecting any refunds of any sort, I don't think I would file. Why bother? And I don't think it looks shady at all.

http://www.smartmoney.com/personal-f...-return-20713/

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02-11-2010 , 07:59 PM

wood_wall

banned

Join Date: Dec 2009 Posts: 292

k thanks. i'll mark that off the list of things to worry about!

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02-11-2010 , 08:04 PM

Rich Muny

Former PPA VP

Join Date: Apr 2005 Posts: 28,525

Quote:

Originally Posted by repulse

Is an individual with no income in a year even required to file a tax return for that year, though?

And if it is optional, would OP be wise to file anyway so as not to look shady?

OP did make income. All of his winning sessions are income. The losing sessions are merely deductions.

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02-11-2010 , 08:14 PM

PokerXanadu

Carpal \'Tunnel

Join Date: Oct 2006 Posts: 10,583

Quote:

Originally Posted by pianospike

The problem with this advice is that you did not have zero gross income; you only had zero net income. But your gross income would be the total of your winning sessions for the year, which needs to be reported as gambling income. Then you can deduct your losing session up to the amount of your winning sessions - on Schedule A Itemized Deductions to file as an amatuer; or on Schedule C Business Income to file as a pro.

You may not end up with any tax liability, but you are still supposed to file a tax return.

But I'm not a tax pro, so you might want to seek help elsewhere than a bunch of degenerate forum addicts.

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02-11-2010 , 08:39 PM

repulse

veteran

Join Date: Jul 2006 Posts: 3,070

Right, sorry for being vague, I had meant net income. I thought the rules for filing a return worked off of net income rather than gross, but it looks like I had that wrong.

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02-11-2010 , 08:42 PM

#10

pianospike

adept

Join Date: Feb 2008 Posts: 1,081

Quote:

Originally Posted by PokerXanadu

Hmmm... yeah, I guess technically you are correct. It probably can't hurt to file OP. It's nothing to worry about--it should take you all of about 30 minutes to run the numbers through TurboTax.

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02-11-2010 , 09:12 PM

#11

Overcooked

journeyman

Join Date: Jan 2010 Posts: 243

If you lose money, aren't you able to claim it bck the next year?

I would file for that reason alone.

That is, if you win a lot of money, you can use this losing year as a deduction next year.

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02-11-2010 , 11:41 PM

#12

Russ Fox

tax practitioner

Join Date: Jun 2004 Posts: 884

Other reasons you might need to file include having W-2Gs or having to report foreign financial accounts (such as online gambling sites).

Quote:

If you lose money, aren't you able to claim it bck the next year?

No. A gambler, professional or amateur, can't deduct gambling losses in excess of gambling wins.

-- Russ Fox

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02-12-2010 , 11:39 AM

#13

Lottery Larry

Home Poker Pimp

Join Date: Jun 2003 Posts: 19,603

Quote:

Originally Posted by pianospike

Hmmm... yeah, I guess technically you are correct. It probably can't hurt to file OP.

Actually, I would strongly suspect that it would hurt OP a lot not to file, especially after the previous two years.

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03-05-2010 , 03:27 AM

#14

jts00ted

stranger

Join Date: May 2009 Posts: 2

What about deducting business expenses in Schedule C?

Can a pro with a losing year claim travel / home office expenses and use the Sch C loss to offset other income?

I seem to recall reading that this was allowed but can't remember where.

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03-05-2010 , 06:12 AM

#15

PokerXanadu

Carpal \'Tunnel

Join Date: Oct 2006 Posts: 10,583

Quote:

Originally Posted by jts00ted

Yes, that is correct. As a pro, you can deduct your gambling losses on your Schedule C up to the amount of your winnings, and then also deduct legitimate business losses on the Schedule C for a net loss carryover to your Form 1040. However, you better damn well be a full-time pro to do this, as one of the main criterion that the IRS looks at in determining whether someone is a truly a pro gambler is the expectation of making income from gambling. If you have other regular income that you are living off of and you are losing money from your poker play, the IRS is unlikely to accept you as a pro (if they examine your return).

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03-05-2010 , 06:21 AM

#16

Reefypoopoo

banned

Join Date: Nov 2007 Posts: 8,625

def file for this year

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03-05-2010 , 05:36 PM

#17

LondonBroil

Pooh-Bah

Join Date: Jan 2003 Posts: 4,937

Quote:

Originally Posted by Russ Fox

No. A gambler, professional or amateur, can't deduct gambling losses in excess of gambling wins.

-- Russ Fox

Do casinos offer any large buy-in tournaments at the end of December? Wouldn't it make sense to play in one if you've made a lot of money during the year? If you win, then great. If not, you're getting a huge "rebate" since you can deduct the buy-in.

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03-05-2010 , 06:30 PM

#18

jts00ted

stranger

Join Date: May 2009 Posts: 2

Quote:

Originally Posted by PokerXanadu

Thank you - I have been a full-time pro for 5 years and this was my first losing year. I converted some IRAs to Roth last year and thus have taxable income for 2009.

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03-06-2010 , 12:04 AM

#19

Reefypoopoo

banned

Join Date: Nov 2007 Posts: 8,625

Quote:

Originally Posted by LondonBroil

that's the same mentality as 'well I just won in blackjack so now I'm playing with the house's $' ... you're also ignoring things like bankroll management, if the player is +EV in the tourny or not, value of having the cash instead, etc.

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03-06-2010 , 05:42 AM

#20

Lego05

Carpal \'Tunnel

Join Date: Mar 2006 Posts: 25,682

Quote:

Originally Posted by Overcooked

If you lose money, aren't you able to claim it bck the next year?

I would file for that reason alone.

That is, if you win a lot of money, you can use this losing year as a deduction next year.

You can't do that.

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03-07-2010 , 12:37 PM

#21

InWithTheBest

grinder

Join Date: Sep 2005 Posts: 480

This actually was something I was considering as well. I've had significant poker income 06-09 and I filed each year as an amature. I started 2010 losing low 5 figs staking and playing, so poker just feels meh now and I don't plan to do much with it for awhile. I live in a state where I am not allowed to deduct losses. Paying on phantom income felt better when I at least was net positive for the year, but if I don't play anymore and owe state taxes this year on my gross 'winnings', that's going to be pretty painful. I guess in the eyes of the my state tax office it's no different, but certainly feels different to me.

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