In these types of threads I have seen many references to the ability of US citizens living abroad to exclude up to ~$86k of their income when filing their taxes.
I am wondering if any of you have discussed this with a tax attorney or if you have filed tax returns as professional gamblers in which the IRS accepted this exclusion.
The IRS says that "Foreign earned income generally is income you receive for services you perform during a period in which you meet both of the following requirements [of living abroad]"
More importantly, they also explicitly list gambling winnings as
unearned income.
My hope would be that they are using gambling winnings in that context to refer to recreational gambling, and that by filing as a professional gambler I would still be able to count my winnings as earned income. However, the language used in "services you perform" is somewhat vague - I'm not technically performing a service, but the examples they list give me the impression they just mean that you have to spend time working. And of course, filing as a professional would still mean that I owe self-employment tax.
I think I will have to discuss this with a tax attorney before I make a decision about moving but I'm still interested in hearing experiences from others.
IRS Guide