the W2G as income. It seems to me this is a more fair way to report gambling
income but maybe the IRS doesn't look at it that way. Unfortunately, a
taxpayer who has any substantial W2G receipts and has equal losses is in the
end paying more income tax.
The Gambler
_____
From: vpFREE@yahoogroups.com [mailto:vpFREE@yahoogroups.com] On Behalf Of
tsaimitch
Sent: Tuesday, February 09, 2010 1:51 PM
To: vpFREE@yahoogroups.com
Subject: [vpFREE] Re: 1099's
You can deduct losses on Schedule A, or file as a professional gambler with
Schedule C.
Might be able to use "Session wins" rather than 1099s as you wins, but I
hear conflicting info on this board.
See http://groups. <http://groups.yahoo.com/group/vpFREE/message/104962>
yahoo.com/group/vpFREE/message/104962 for some problems with Schedule C.
http://www.readybet <http://www.readybetgo.com/book-reviews/review-606.html>
go.com/book-reviews/review-606.html
How To Turn Poker Playing Into a Business (Knowing What to Deduct to Improve
Your Odds With the IRS) by Ann-Margaret Johnston (122 pages, paperbound,
$19.95) and The Tax Guide for Gamblers by Roger and Yolanda Roche -- Sixth
Edition (64 pages, paperbound, $29.95). Both are excellent references and
both are available at Gambler's Book Shop in Las Vegas.
http://www.casinoga <http://www.casinogaming.com/features/taxlaws.html>
ming.com/features/taxlaws.html
All winnings from all forms of gambling are taxable and must be declared as
income on your tax return.
All losses from all forms of gambling are deductible as an itemized
deduction for recreational players, limited to the amount of winnings
declared.
Professional gamblers hold file as a self-employed business using Schedule
C.
The value of "comps" received are considered to be gaming winnings and
should be included in your total winnings. This does allow you to deduct
gaming losses to offset the income from the "comps."
Wins and losses are reported only in the year they occur. Excess losses
cannot be carried forward or back to offset winnings in other years.
Married couples filing a joint return must combine their winnings and
combine their losses, and report only one figure for each.
The IRS has issued instructions that "lumping" is unacceptable. "Lumping" is
the practice of reporting one net win figure and no losses, or reporting
nothing if your net from gambling is a loss. You must report the total of
your winning sessions separately from the total of your losing sessions.
The IRS requires that an accurate diary or similar record must be maintained
for substantiating your wins and losses, and that the diary should contain
at least the following information: (1) the date and type of your specific
wager; (2) the name of the gaming establishment; (3) the address or location
of the gaming establishment; (4) the names of the other person(s), if any,
present with you; (5) the amount(s) you won or lost.
The IRS also requires that in order to substantiate your diary, supplemental
records are required, including the following (these records are not to be
submitted with your return, but will be needed should you be audited): (1)
W-2Gs; (2) wagering tickets or receipts; (3) canceled checks; (4) credit
card records such as cash advances; (5) bank withdrawals; (6) any receipts
provided by the gambling establishment.
KEEP RECORDS OF YOUR GAMBLING TRANSACTIONS
In February of 1998, in a case involving an unemployed gambler who failed to
file timely returns for two years and kept no records, the Tax Court ruled
that the gambler could not deduct unsubstantiated gambling losses. In
addition the Tax Court upheld the IRS which had levied additional amounts
for failure to file on time and for the accuracy-related negligence penalty.
This increased the gambler's tax liability by 43%!
In other words, they threw the book at this gambler, who actually told the
court that although he maintained a gambling log for one of the years in
question, it was not accurate because it was too time-consuming to make it
precise.
If you are collecting W2-Gs and not keeping accurate records, this very well
could be in your future.
<many more details on the webpage>
http://www.irs. <http://www.irs.gov/taxtopics/tc419.html>
gov/taxtopics/tc419.html
You may deduct gambling losses only if you itemize deductions. Claim your
gambling losses as a miscellaneous deduction that is not subject to the 2%
limit on Form 1040, Schedule A (PDF). However, the amount of losses you
deduct may not be more than the amount of gambling income reported on your
return. It is important to keep an accurate diary or similar record of your
gambling winnings and losses. To deduct your losses, you must be able to
provide receipts, tickets, statements or other records that show the amount
of both your winnings and losses. Refer to Publication 529, Miscellaneous
Deductions, for more information.
[Non-text portions of this message have been removed]
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