Re: A new us tax question


"Gilbert" <stevmar9@xxxxxxxxxxxxx> wrote in message
news:3j99f1d0qnj2gqrvmr5v0ilhm7if4a6mk2@xxxxxxxxxx
> Hi, I just started to play poker online, And I need to know:
> Wich dollar amount will be taxable: the bankroll that I have online or
> the money that I transfer to my checking account.

Technically, any amount won are includible, and amounts lost are a schedule
A deduction. There's a good summary of this somewhere on line by an
accountant. Maybe someone can post a link for you.

Another post suggests that, since online rooms are offshore and have no
reporting requirements to the IRS, that somehow absolves you of reporting
these earnings. While there is probably universal noncompliance with these
rules, income tax is a self-reporting system and you must sign the return.
Someone, somewhere, someday is going to take the pill for this; try to stay
out of the firing line.
>
> What about if I win a 10000 seat in the wsop in december and I am the
> first one out of the tournament next year:
> do I have to report 10000 in winings this year and 10000 in loses next
> year? will the amounts paid to the IRS for gambling cancel to 0?
>
A response below indicates that the seat won is taxable in one calendar year
and the loss reported in the year of the game. However, most sites make the
seat nontransferable and you must play at least the first one you win. A
plausible argument can be made that nothing of value is transferred until
the big tournament starts, making both the income and gambling loss incur at
the same time. It's like getting a paycheck on January 1 for the last two
weeks of December. Of course, a second seat or one that is transferable
would be taxable at the time it is won.

Second part: the seat is a $10,000 item of income, and the tourney loss is
a schedule A loss ( unless you are a pro). So there is no net tax, but
your AGI increases by 10K, which may make you ineligible for certain
deductions and credits.

> If I make a 50000 bankroll and I take out half of it and I give it to
> my daughter to buy a house. and I use the other half to pay the IRS
> does my daughter also has to pay taxes for it?

No. Its a gift. Consult with a tax advisor before making gifts in excess
of $11K per year to anyone. And "Bankroll"
and "income" arent the same thing.

> Any help and comment will be appreciated.


.

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