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Poker Legislation & PPA Discussion hosted by Rich Muny Discussions of various poker-related laws and steps players can take to push for better laws.

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Old 04-27-2017, 12:23 AM   #1
Gramps
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Effect of Trump Tax Proposals on US professionals

Would post in the existing sticky thread, but it's locked.

Anyone think there's possible changes on the horizon affecting US professionals? (i.e. territorial system mention for expat grinders or potential for business income rates via pass-throughs, etc.)
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Old 05-01-2017, 09:19 PM   #2
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Re: Effect of Trump Tax Proposals on US professionals

I imagine it will have a much bigger effect on amateurs. Professionals should be able to continue to deduct tournament fees and cash buy-ins as business expenses. It seems like those deductions will go away for non-professionals unless gambling somehow becomes a separate category like capital gains.
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Old 05-02-2017, 08:26 PM   #3
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Re: Effect of Trump Tax Proposals on US professionals

If the 15% tax rate for pass-through entities (Partnerships, Corps, S-Corps, LLCs, etc.) is enacted into law, that could have a huge effect on professionals who structure themselves/business in such a way.

*If* *could*
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Old 05-03-2017, 04:05 PM   #4
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Re: Effect of Trump Tax Proposals on US professionals

Yes, obviously if a business's taxes are significantly lowered, that would have a big effect. However, for amateurs, it is the deductions side of the equation that makes a big difference.
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Old 09-28-2017, 02:51 PM   #5
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Re: Effect of Trump Tax Proposals on US professionals

Looks like sole proprietorships may be capped at a 25% top rate.

No specific mention of going to the territorial tax system yet (vs. worldwide income) - it's been in some articles leading up to this latest outline, but we'll see. And even if implemented, a territorial system *may* only apply to corporations, not individuals/sole proprietors.

[I.e. for US grinders abroad, that *could* give opportunities to live/grind in a tax-free location, and only pay self-employment (SSN/MC) tax. In best-case.]
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Old 11-03-2017, 07:44 AM   #6
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Re: Effect of Trump Tax Proposals on US professionals

The House tax bill has been published, and it is bad for both recreational and professional poker players (and all gamblers):

1. It eliminates the Schedule A itemized deduction for gambling losses.

2. It eliminates expense deductions (i.e business expenses beyond gambling losses) for professional gamblers (those filing a Schedule C).

This is just the first draft of the legislation, which is likely to undergo many changes before votes in the House and the Senate, and it has a tough battle to passage. But it looks really bad for poker players.

This should be of vital interest to the PPA and all poker players.

The AGA, by the way, came out in support of the bill, probably because of the huge reduction in corporate taxes, as well as the elimination of the estate tax (a big boon to Adelson and his family):

House tax plan includes change that could affect professional gamblers, stadium construction bonds

Republican Tax Plan 2017: How the House reform bill hits deductions, brackets & the middle-class

Note: #1 above can be solved by adding this to the legislation:

Quote:
SEC. XXX. GROSS INCOME FOR SKILL GAMES.

Section 183 of part VI of subchapter B of chapter 1 (relating to activities not engaged in for profit) is amended by adding at the end the following new subsection:

'(f) Gross income for skill games

'In the case of wagering in games in which over any significant interval the outcome of the game is materially influenced by the skill of the participants, gross income is calculated by subtracting the total amount of wagers from the total winnings from such wagers for any specified period of time.‘.
This would make it so only net poker winnings for the year would be reportable as income.

Last edited by PokerXanadu; 11-03-2017 at 07:49 AM.
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Old 11-03-2017, 08:12 AM   #7
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Re: Effect of Trump Tax Proposals on US professionals

Eliminating the Schedule A itemized deduction for gambling losses isn't bad, it's catastrophic. It's essentially every losing recreational player facing an arbitrarily large tax bill on top of their loss for the year and every non-professional player being forced out of the game entirely.

I see the mention in the article you linked but I'm having trouble finding this in the full bill text, PX, do you have a source? Mostly just hoping that the article conveyed this incorrectly, maybe conflating it with the other effect you noted "Limitation on Wagering Losses".

And obviously +1 to your proposed solution...
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Old 11-03-2017, 08:52 AM   #8
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Re: Effect of Trump Tax Proposals on US professionals

Looks like you have cross posted this thread to NVG.

Like @repulse said here,

and I said over there https://forumserver.twoplustwo.com/s...25&postcount=2,

I dont see any mention of anything elimination the Schedule A gambling loss deduction for non professionals. If that were to be the case, and enforced, legalized gambling would end as we know it. I would hope that the casino lobbys would have a thing or two to say if that were to happen.
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Old 11-03-2017, 03:18 PM   #9
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Re: Effect of Trump Tax Proposals on US professionals

Quote:
Originally Posted by New Bill

(a) IN GENERAL.—Section 165(d) is amended by adding at the end the following: ‘‘For purposes of the preceding sentence, the term ‘losses from wagering transactions’ includes any deduction otherwise allowable under this chapter incurred in carrying on any wagering transaction.’’.
Quote:
Originally Posted by IRC 165(d)
Losses from wagering transactions shall be allowed only to the extent of the gains from such transactions.

The new bill does NOT eliminate the Schedule A itemized deduction for gambling losses. (The elimination of that would be catastrophic.)



If the new bill passes as written:

1. You can still deduct losses up to the amount of winnings. The only change this makes is that you can't deduct incidental expenses (e.g. casino ATM charges) in an amount that when added to your gambling loss deduction would exceed gambling winnings. This isn't nearly as big a deal as eliminating the gambling loss deduction.


2. With respect to professionals, I think it does limit deductions for ordinary business expenses for professionals to an amount that when combined with losses does not exceed winnings. I didn't read enough of the bill and think about it enough to be 100% sure on this one, but I think it does do that.
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Old 11-03-2017, 05:55 PM   #10
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Re: Effect of Trump Tax Proposals on US professionals

Quote:
Originally Posted by Lego05 View Post
The new bill does NOT eliminate the Schedule A itemized deduction for gambling losses. (The elimination of that would be catastrophic.)



If the new bill passes as written:

1. You can still deduct losses up to the amount of winnings. The only change this makes is that you can't deduct incidental expenses (e.g. casino ATM charges) in an amount that when added to your gambling loss deduction would exceed gambling winnings. This isn't nearly as big a deal as eliminating the gambling loss deduction.


2. With respect to professionals, I think it does limit deductions for ordinary business expenses for professionals to an amount that when combined with losses does not exceed winnings. I didn't read enough of the bill and think about it enough to be 100% sure on this one, but I think it does do that.
Thanks for the clarifications. I wasn't able to find the bill text itself when I posted earlier. Hopefully these will be the only changes in the final versions (unless they want to adopt my amendment, of course!).
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Old 11-05-2017, 05:03 AM   #11
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Re: Effect of Trump Tax Proposals on US professionals

I heard it was going to make poker great again.
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