Interesting and informative post from "Taxdood" on a recent case from the U.S. Tax Court:
Full decision: http://www.ustaxcourt.gov/InOpHistoric/MOORE3.TCM.WPD.pdf
All the things I hate about the game I love
Interesting and informative post from "Taxdood" on a recent case from the U.S. Tax Court:
Posted by Rakewell at 3:13 PM
Labels: legal, other blogs, taxation
4 comments:
Grump, would you please comment on how YOU file? I'm a local pro who files as a non-pro since my tax preparer said that would be best for me. But, it's confusing as all hell!
I'm worried I'll get audited someday.
Thanks!
Jim
I can't imagine how filing as a recreational player would be advantageous. There are two good books on taxes for gamblers: Margaret Johnston's "How to Turn Your Poker Playing Into a Business" (title does not match contents), and Scott & Chien "Tax Help for Gamblers." Both say that most accountants don't understand the specialized rules for gamblers, which may explain your tax preparer's odd advice.
Thanks, well I presume it has to do with the 15% self employment tax you need to pay when you are a pro.
So assuming you make $40K/yr, that's $6K vs. itemizing and benefiting more than $6K with write-offs.
What's MORE confusing is I've listened to Russel Fox (Poker author and CPA - www.taxabletalk.com) state "You almost NEVER have a choice with which way you can file".
In case your interested, here's Russ talking about it:
http://podcasts.deucescracked.com/deuceplays/Deuce_Plays_-_Episode_56_-_2-2-2010_-_Poker_Taxation.mp3
Thanks!
Jim
Jim,
You are correct to state that a taxpayer almost never has a choice between filing as a professional or recreational gambler. The full-time college student who spends significant time gambling is one rare instance of a taxpayer who has a choice.
You also correctly point out the primary "downside" to filing as a professional: The self-employment tax.
I started my blog last year primarily to discuss the various tax issues associated with gambling. I have compiled all of my posts discussing the nuts and bolts here:
http://taxdood.com/category/gambling-tax-basics/
Note that the posts are listed in reverse chronological order. I suggest starting from the oldest post. Scroll to the bottom and click "Older Entries" to view the older posts.
Hope that helps,
Brad
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