Quote:
Originally Posted by memberley
I'm not sure about the advice on different "sessions" for non pro's, IMO if you go to the casino and come back with 2k more than you went with, you claim 2k in gambling winnings. The fact that gambling losses are only allowed if you itemize your deductions makes this deduction nil for about 85% of all tax filers who don't have substantial mortgage interest to make itemizing deductions even an option. This fact would make this different sessions theory very unfair. To get around this, anyone who does have substantial gambling income should just fill out a schedule C and treat it as a business, this way you don't have any gambling income, it is now business income and you can deduct all of your expenses incurred.
I certainly agree with you that it is unfair. However, it is still correct.
Also, you can't just fill out a Schedule C whenever you want. I do believe that the IRS could challenge you on it and you would have to show that you actually are acting as a professional gambler, rather than it just being a hobby. Also if you file as a professional then you would have to pay a 15% self employment tax.
Quote:
Originally Posted by memberley
And another question, for all of those playing on new years eve, how do you do your taxes? What was your balance when the clock struck midnight? I'm sure the people talking about constructive reciept etc are indeed right by law, but in practice who really does this?
I do it.
The balance in your account is irrelevant for tax purposes. When filing as a hobby you sum all of your winning sessions and report that as income and sum all of your losing sessions and can report that as an itemized deduction. I just use Holdem Manager to filter my results and see the winnings and losses during the year. I also keep a log in Excel as the year goes on, in which I generally use each day as a session for online cash games and each tournament is a session and for live poker each table I play at is a session, etc.
So yea, before midnight on New Year's counts for that tax year and after counts for the next tax year. I've never run into this situation before though. Seriously, who is playing through midnight on New Year's?
Last edited by Lego05; 10-02-2011 at 09:03 PM.