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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 01-04-2018, 09:22 AM   #26
PokerXanadu
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Re: Effect of Trump Tax Proposals on US professionals

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Originally Posted by akashenk View Post
I mean, if one is a professional poker player, and is incorporated as such in the business of playing poker, and one has expenses for training, travel, etc. which are necessary to conduct one's business, then I don't see how congress could suddenly say... no you can't deduct these as normal business expenses. It just doesn't seem like something which would survive judicial review.
When has that ever stopped them?

Republicans have taken an anti-gambling stance consistently on their party platform. It does not surprise me that the tax plan includes a change which penalizes gamblers. I am surprised it wasn't worse, although I'm sure Adelson's money was a consideration.
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Old 01-04-2018, 03:44 PM   #27
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Re: Effect of Trump Tax Proposals on US professionals

So the law change is terrible for someone like a live player who travels a lot/plays big buyin MTTs/has big expenses/can have a losing year, and (previoulsy) could deduct all of these expenses & carry over losses to a future tax year? But has little-to-no-effect for the online grinder with low deductible expenses and steady wins? (i.e. $5k or less expenses on $50-100k YoY, etc.)

And no idiciations that the new, below-the-line QBI 20% deduction, wouldn't apply to professional gamblers? Except for the above limitations ( i.e. live player/MTT/big expenses/losing years)?

Last edited by Gramps; 01-04-2018 at 03:47 PM. Reason: My tax law vocabulary is obvioulsy lacking, despite taking 2 classes in it eons ago... :p
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Old 01-04-2018, 04:23 PM   #28
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Re: Effect of Trump Tax Proposals on US professionals

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Originally Posted by Gramps View Post
So the law change is terrible for someone like a live player who travels a lot/plays big buyin MTTs/has big expenses/can have a losing year, and (previoulsy) could deduct all of these expenses & carry over losses to a future tax year? But has little-to-no-effect for the online grinder with low deductible expenses and steady wins? (i.e. $5k or less expenses on $50-100k YoY, etc.)
The change (and there is obviously confusion as to whom it effects and whom it doesn't), only means those effected can no longer carry any losses from one year to the next. And by losses, I mean combined gambling losses and related expenses. So, if you have a bad year, that bad year cannot benefit you the next year as it can with other activities (investing, buying/selling stuff)

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And no idiciations that the new, below-the-line QBI 20% deduction, wouldn't apply to professional gamblers? Except for the above limitations ( i.e. live player/MTT/big expenses/losing years)?
There are limitations on the QBI deduction based on income level and these restrictions are more stringent for service-based entities (of which poker players are) compared to entities which make things. I don't see any reason why the deduction would be different for a gambling entity compared to another service-based entity, like a law firm or doctor's office.
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Old 01-04-2018, 04:32 PM   #29
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Re: Effect of Trump Tax Proposals on US professionals

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Originally Posted by PokerXanadu View Post
When has that ever stopped them[Congress]?
touche

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Originally Posted by PokerXanadu View Post

Republicans have taken an anti-gambling stance consistently on their party platform. It does not surprise me that the tax plan includes a change which penalizes gamblers. I am surprised it wasn't worse, although I'm sure Adelson's money was a consideration.
I'm only aware of the anti online gambling planks in 2008 and 2012 (gone in 2016). Am I missing something?
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Old 01-05-2018, 01:09 PM   #30
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Re: Effect of Trump Tax Proposals on US professionals

uigea 06
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Old 01-26-2018, 04:00 PM   #31
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Re: Effect of Trump Tax Proposals on US professionals

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I agree with everything you say except it is all based on filing gambling winnings/losses (or other deductions) on an individual person's Schedule C and 1040. If a person is a shareholder of an S-Corp, they do not report business income/loss on a schedule C. The business entity itself files a return and any net income is reported as pass-through income on the individual's return in a schedule K. So, the gambling business, would deduct the gambling-related expenses. Nothing in the info I have seen about the IRS clarification seems to indicate that a business would no longer be able to deduct these expenses in their returns. So, I think the distinction may just come down to... does your legal entity file a separate return? If the answer is yes, I think the business deductions will remain. If the answer is no (ie if your business activity is captured in your individual Schedule C/1040), then it appears the deduction will be limited until this provision expires.
I have come back from meeting with my tax advisor. As I expected, she is in agreement with me that the new law would in no way limit what an s-corp (formed for gambling purposes) could deduct as far as business expenses are concerned. So, if you're incorporated as an s-corp, your company can continue to deduct your travel, training, other related business expenses on your business tax return.

And this is the crux of the matter of what I originally mentioned. Since there ARE new limitations on how much, in the way of gambling-related expenses, can be deducted on one's PERSONAL tax return, it seems to me there may be some cases where incorporation would be a beneficial strategy.

Anyhow, this is her and my opinion. Hers is more qualified than mine, but even so, it seems that one can ask the same question to two different accountants and get two different answers. As always, I would recommend anyone directly affected by the changes in this new law to consult their own tax professional who would be more familiar with the specifics of their unique situation.
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