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Getting screwed on my Gambling "income" this year even though I got no cash out of it.
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xy...@hotmail.com
Apr 17, 2015, 3:55:04 PM4/17/15
to
Since I don't own a home and don't itemize I am screwed this year. I forgot that the law mostly allows only those who own homes (let's be honest that's what makes most people able to itemize) to deduct the losses on their gambling income to offset the wins.
So here's what happened: I made several bets on football games during 2014. I won about $300 or so. But with the winnings (without ever receiving a cent from the house) I bet on other football games that I lost. So in my "bucket" at the end of the year I had about $25. Add back pending bets as of year-end and I was left with maybe $100.
So basically I have to pay taxes on all the winnings even if I never received a dime from the house! Yes, I got the benefit of extra bets with those wins but still sucks that mortgage holders and those who itemize get to deduct the losses and I don't basically because I rent.
--
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So here's what happened: I made several bets on football games during 2014. I won about $300 or so. But with the winnings (without ever receiving a cent from the house) I bet on other football games that I lost. So in my "bucket" at the end of the year I had about $25. Add back pending bets as of year-end and I was left with maybe $100.
So basically I have to pay taxes on all the winnings even if I never received a dime from the house! Yes, I got the benefit of extra bets with those wins but still sucks that mortgage holders and those who itemize get to deduct the losses and I don't basically because I rent.
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2011) - All rights reserved. >>
<< ------------------------------------------------------- >>
Pfsszxt
Apr 17, 2015, 4:45:04 PM4/17/15
to
On 4/17/2015 2:52 PM, xy...@hotmail.com wrote:
> Since I don't own a home and don't itemize I am screwed this year.
I forgot that the law mostly allows only those who own homes (let's be
honest that's what makes most people able to itemize) to deduct the
losses on their gambling income to offset the wins.
>
> So here's what happened: I made several bets on football games during
2014. I won about $300 or so. But with the winnings (without ever receiving
a cent from the house) I bet on other football games that I lost. So in my
"bucket" at the end of the year I had about $25. Add back pending bets
as of
year-end and I was left with maybe $100.
>
> So basically I have to pay taxes on all the winnings even if I never
received a dime from the house! Yes, I got the benefit of extra bets with
those wins but still sucks that mortgage holders and those who itemize get
to deduct the losses and I don't basically because I rent.
>
Yep! Winnings count as income and losses must be subtracted from the
> Since I don't own a home and don't itemize I am screwed this year.
I forgot that the law mostly allows only those who own homes (let's be
honest that's what makes most people able to itemize) to deduct the
losses on their gambling income to offset the wins.
>
> So here's what happened: I made several bets on football games during
2014. I won about $300 or so. But with the winnings (without ever receiving
a cent from the house) I bet on other football games that I lost. So in my
"bucket" at the end of the year I had about $25. Add back pending bets
as of
year-end and I was left with maybe $100.
>
> So basically I have to pay taxes on all the winnings even if I never
received a dime from the house! Yes, I got the benefit of extra bets with
those wins but still sucks that mortgage holders and those who itemize get
to deduct the losses and I don't basically because I rent.
>
income. Not much different from that of stocks and bonds, though in the
latter, if losses are large only a portion is counted in the given year
--the remainder carries forward
---
This email has been checked for viruses by Avast antivirus software.
http://www.avast.com
ira smilovitz
Apr 17, 2015, 5:01:41 PM4/17/15
to
On Friday, April 17, 2015 at 3:55:04 PM UTC-4, xy...@hotmail.com wrote:
> Since I don't own a home and don't itemize I am screwed this year. I forgot that the law mostly allows only those who own homes (let's be honest that's what makes most people able to itemize) to deduct the losses on their gambling income to offset the wins.
>
> So here's what happened: I made several bets on football games during 2014. I won about $300 or so. But with the winnings (without ever receiving a cent from the house) I bet on other football games that I lost. So in my "bucket" at the end of the year I had about $25. Add back pending bets as of year-end and I was left with maybe $100.
>
> So basically I have to pay taxes on all the winnings even if I never received a dime from the house! Yes, I got the benefit of extra bets with those wins but still sucks that mortgage holders and those who itemize get to deduct the losses and I don't basically because I rent.
>
> --
Actually, you're wrong. You come out better by not owning a house. The IRS gives you a standard deduction whether or not you actually spend that money on deductible items. People who itemize must spend every dollar they claim as a deduction. Then they only get back a fraction of that expense at their marginal tax rate.
> Since I don't own a home and don't itemize I am screwed this year. I forgot that the law mostly allows only those who own homes (let's be honest that's what makes most people able to itemize) to deduct the losses on their gambling income to offset the wins.
>
> So here's what happened: I made several bets on football games during 2014. I won about $300 or so. But with the winnings (without ever receiving a cent from the house) I bet on other football games that I lost. So in my "bucket" at the end of the year I had about $25. Add back pending bets as of year-end and I was left with maybe $100.
>
> So basically I have to pay taxes on all the winnings even if I never received a dime from the house! Yes, I got the benefit of extra bets with those wins but still sucks that mortgage holders and those who itemize get to deduct the losses and I don't basically because I rent.
>
> --
Ira Smilovitz
taxed and spent
Apr 17, 2015, 6:10:04 PM4/17/15
to
<xy...@hotmail.com> wrote in message
news:b40f038f-6b32-4ecb...@googlegroups.com...
> Since I don't own a home and don't itemize I am screwed this year. I
> forgot that the law mostly allows only those who own homes (let's be
> honest that's what makes most people able to itemize) to deduct the losses
> on their gambling income to offset the wins.
>
> So here's what happened: I made several bets on football games during
> 2014. I won about $300 or so. But with the winnings (without ever
> receiving a cent from the house) I bet on other football games that I
> lost. So in my "bucket" at the end of the year I had about $25. Add back
> pending bets as of year-end and I was left with maybe $100.
>
> So basically I have to pay taxes on all the winnings even if I never
> received a dime from the house! Yes, I got the benefit of extra bets with
> those wins but still sucks that mortgage holders and those who itemize get
> to deduct the losses and I don't basically because I rent.
The rent you pay reflects the fact that your landlord gets to deduct his
> forgot that the law mostly allows only those who own homes (let's be
> honest that's what makes most people able to itemize) to deduct the losses
> on their gambling income to offset the wins.
>
> So here's what happened: I made several bets on football games during
> 2014. I won about $300 or so. But with the winnings (without ever
> receiving a cent from the house) I bet on other football games that I
> lost. So in my "bucket" at the end of the year I had about $25. Add back
> pending bets as of year-end and I was left with maybe $100.
>
> So basically I have to pay taxes on all the winnings even if I never
> received a dime from the house! Yes, I got the benefit of extra bets with
> those wins but still sucks that mortgage holders and those who itemize get
> to deduct the losses and I don't basically because I rent.
mortgage on the rental property.
xy...@hotmail.com
Apr 18, 2015, 3:05:02 AM4/18/15
to
On Friday, April 17, 2015 at 6:10:04 PM UTC-4, taxed and spent wrote:
> <xy...@hotmail.com> wrote in message
> news:b40f038f-6b32-4ecb...@googlegroups.com...
> > Since I don't own a home and don't itemize I am screwed this year. I
> > forgot that the law mostly allows only those who own homes (let's be
> > honest that's what makes most people able to itemize) to deduct the losses
> > on their gambling income to offset the wins.
> >
> > So here's what happened: I made several bets on football games during
> > 2014. I won about $300 or so. But with the winnings (without ever
> > receiving a cent from the house) I bet on other football games that I
> > lost. So in my "bucket" at the end of the year I had about $25. Add back
> > pending bets as of year-end and I was left with maybe $100.
> >
> > So basically I have to pay taxes on all the winnings even if I never
> > received a dime from the house! Yes, I got the benefit of extra bets with
> > those wins but still sucks that mortgage holders and those who itemize get
> > to deduct the losses and I don't basically because I rent.
>
> The rent you pay reflects the fact that your landlord gets to deduct his
> mortgage on the rental property.
>
> --
The landlord also has to include my rent as income. I don't get what you're saying.
> <xy...@hotmail.com> wrote in message
> news:b40f038f-6b32-4ecb...@googlegroups.com...
> > Since I don't own a home and don't itemize I am screwed this year. I
> > forgot that the law mostly allows only those who own homes (let's be
> > honest that's what makes most people able to itemize) to deduct the losses
> > on their gambling income to offset the wins.
> >
> > So here's what happened: I made several bets on football games during
> > 2014. I won about $300 or so. But with the winnings (without ever
> > receiving a cent from the house) I bet on other football games that I
> > lost. So in my "bucket" at the end of the year I had about $25. Add back
> > pending bets as of year-end and I was left with maybe $100.
> >
> > So basically I have to pay taxes on all the winnings even if I never
> > received a dime from the house! Yes, I got the benefit of extra bets with
> > those wins but still sucks that mortgage holders and those who itemize get
> > to deduct the losses and I don't basically because I rent.
>
> The rent you pay reflects the fact that your landlord gets to deduct his
> mortgage on the rental property.
>
> --
brian...@verizon.net
Apr 18, 2015, 3:05:02 AM4/18/15
to
> So basically I have to pay taxes on all the winnings even if I never received a dime from the house!
Why do you think you never received "a dime from the house!". Of course you did. You just choose to reinvest it in more wagers. That was your choice and has no effect on the taxation of your winnings.
taxed and spent
Apr 18, 2015, 9:40:03 AM4/18/15
to
<xy...@hotmail.com> wrote in message
news:8124bf31-52a8-4157...@googlegroups.com...
expected. The amount of return expected is based on rates available from
alternative investments, risk, and the amount of effort required to manage
this particular investment. If the expected after tax return is x% given
the fact that mortgage interest is deductible, that same x% return would be
expected even if the mortgage interest is not deductible. If mortgage
interest is not deductible, rents must rise in order to achieve that same x%
after tax return.
Allowing homeowners a mortgage interest deduction puts individually owned
houses on the same footing, more or less, as rental property.
xy...@hotmail.com
Apr 18, 2015, 11:55:03 AM4/18/15
to
For some reason, two of my replies have not shown up.
Maybe this one will. Anyway, I won't rehash them completely here, but let me ask you, other than the level of riskiness, what is the difference in the following scenarios:
I buy Stock Option A on February of a year, sell it two months later for a gain of $200.
I buy Stock Option B in October of a year, sell it in December, for a loss of $200.
Even though I don't itemize, I still get to claim $0 net income from my stock sales.
Now, change nothing in the story above except that I participated in a riskier gamble. That is, instead of buying options and betting on a stock price change, I bet on the outcome of a game.
Why do I get punished in the latter case for not itemizing and and not in the former? It would be one thing if ALL gamblers, whether they itemize or not, didn't get to deduct their losses. But, no, unlike in the case when you bet on stock price changes, when you bet on sports outcomes, the person who doesn't itemize gets screwed. I just don't think it's fair.
On Saturday, April 18, 2015 at 3:05:02 AM UTC-4, brian...@verizon.net wrote:
> > So basically I have to pay taxes on all the winnings even if I never received a dime from the house!
>
> Why do you think you never received "a dime from the house!". Of course you did. You just choose to reinvest it in more wagers. That was your choice and has no effect on the taxation of your winnings.
========================================= MODERATOR'S COMMENT:
Your posts are not appearing because you are topposting. Please place
your comments after the portion of the post(s) you are replying to, and
cut out the unnecessary part of the prior post that you are not replying
to.
Maybe this one will. Anyway, I won't rehash them completely here, but let me ask you, other than the level of riskiness, what is the difference in the following scenarios:
I buy Stock Option A on February of a year, sell it two months later for a gain of $200.
I buy Stock Option B in October of a year, sell it in December, for a loss of $200.
Even though I don't itemize, I still get to claim $0 net income from my stock sales.
Now, change nothing in the story above except that I participated in a riskier gamble. That is, instead of buying options and betting on a stock price change, I bet on the outcome of a game.
Why do I get punished in the latter case for not itemizing and and not in the former? It would be one thing if ALL gamblers, whether they itemize or not, didn't get to deduct their losses. But, no, unlike in the case when you bet on stock price changes, when you bet on sports outcomes, the person who doesn't itemize gets screwed. I just don't think it's fair.
On Saturday, April 18, 2015 at 3:05:02 AM UTC-4, brian...@verizon.net wrote:
> > So basically I have to pay taxes on all the winnings even if I never received a dime from the house!
>
> Why do you think you never received "a dime from the house!". Of course you did. You just choose to reinvest it in more wagers. That was your choice and has no effect on the taxation of your winnings.
Your posts are not appearing because you are topposting. Please place
your comments after the portion of the post(s) you are replying to, and
cut out the unnecessary part of the prior post that you are not replying
to.
taxed and spent
Apr 18, 2015, 12:35:03 PM4/18/15
to
<xy...@hotmail.com> wrote in message
news:0e966ccc-9f8f-4687...@googlegroups.com...
> For some reason, two of my replies have not shown up.
>
> Maybe this one will. Anyway, I won't rehash them completely here, but let
> me ask you, other than the level of riskiness, what is the difference in
> the following scenarios:
>
> I buy Stock Option A on February of a year, sell it two months later for a
> gain of $200.
>
> I buy Stock Option B in October of a year, sell it in December, for a loss
> of $200.
>
> Even though I don't itemize, I still get to claim $0 net income from my
> stock sales.
>
> Now, change nothing in the story above except that I participated in a
> riskier gamble. That is, instead of buying options and betting on a stock
> price change, I bet on the outcome of a game.
>
> Why do I get punished in the latter case for not itemizing and and not in
> the former? It would be one thing if ALL gamblers, whether they itemize or
> not, didn't get to deduct their losses. But, no, unlike in the case when
> you bet on stock price changes, when you bet on sports outcomes, the
> person who doesn't itemize gets screwed. I just don't think it's fair.
You point out this one item in the tax code to show the tax code is not
>
> Maybe this one will. Anyway, I won't rehash them completely here, but let
> me ask you, other than the level of riskiness, what is the difference in
> the following scenarios:
>
> I buy Stock Option A on February of a year, sell it two months later for a
> gain of $200.
>
> I buy Stock Option B in October of a year, sell it in December, for a loss
> of $200.
>
> Even though I don't itemize, I still get to claim $0 net income from my
> stock sales.
>
> Now, change nothing in the story above except that I participated in a
> riskier gamble. That is, instead of buying options and betting on a stock
> price change, I bet on the outcome of a game.
>
> Why do I get punished in the latter case for not itemizing and and not in
> the former? It would be one thing if ALL gamblers, whether they itemize or
> not, didn't get to deduct their losses. But, no, unlike in the case when
> you bet on stock price changes, when you bet on sports outcomes, the
> person who doesn't itemize gets screwed. I just don't think it's fair.
fair? I can point out dozens with a real negative effect on people and the
economy.
This code section was undoubtedly written due to many non-professional
gamblers pulling all sorts of scams on their tax returns.
xy...@hotmail.com
Apr 18, 2015, 7:05:03 PM4/18/15
to
What does gamblers in general performing tax shenanigans have to do with letting those who itemize combine their losses and gains for the most risky bets ( like sports gambling , as opposed to stock option betting), while not allowing those who don't itemize the same benefit ?
Mark Bole
Apr 18, 2015, 10:01:41 PM4/18/15
to
On 2015-04-18 16:04, xy...@hotmail.com wrote:
> What does gamblers in general performing tax shenanigans have to do with letting those who itemize combine their losses and gains for the most risky bets ( like sports gambling , as opposed to stock option betting), while not allowing those who don't itemize the same benefit ?
>
Leaving aside the other (correct) comments about how taking a standard
> What does gamblers in general performing tax shenanigans have to do with letting those who itemize combine their losses and gains for the most risky bets ( like sports gambling , as opposed to stock option betting), while not allowing those who don't itemize the same benefit ?
>
deduction is actually a better deal tax-wise, are you correctly taking
into account your basis in each wager when figuring your gross income?
--
Mark Bole, EA
http://markboletax.com
Arthur Kamlet
Apr 18, 2015, 10:15:03 PM4/18/15
to
In article <mgtvcg$s9f$1...@news.mixmin.net>,
Actually it would be nice if you could net your daily gambling
winnings and losses and repoprt the difference as gambling winnings or losses.
Ignoring the case of professional gamblers who can do this netting,
a recreational or casual gambler can also do this (claim daily
cash out less cash in) if all three of these elements are present:
1. Complete substantiation -- keep a daily log book as described in
Pub 529,
2. Undue burden -- it would be an undue burden on the taxpayer to
have to keep records on every throw of the dice, deal of the
cards, spin of the wheel, etc, and
3. Accession to wealth == test is met if it would be quite inconvenient
to turn your winning tickets, card tally, betting slip, etc into
cash.
While slots action, craps, many table games, meet the above three
elements, sports gambling, keno, bingo, lotteries do not.
--
ArtKamlet at a o l dot c o m Columbus OH K2PZH
winnings and losses and repoprt the difference as gambling winnings or losses.
Ignoring the case of professional gamblers who can do this netting,
a recreational or casual gambler can also do this (claim daily
cash out less cash in) if all three of these elements are present:
1. Complete substantiation -- keep a daily log book as described in
Pub 529,
2. Undue burden -- it would be an undue burden on the taxpayer to
have to keep records on every throw of the dice, deal of the
cards, spin of the wheel, etc, and
3. Accession to wealth == test is met if it would be quite inconvenient
to turn your winning tickets, card tally, betting slip, etc into
cash.
While slots action, craps, many table games, meet the above three
elements, sports gambling, keno, bingo, lotteries do not.
--
ArtKamlet at a o l dot c o m Columbus OH K2PZH
taxed and spent
Apr 19, 2015, 11:50:03 AM4/19/15
to
<xy...@hotmail.com> wrote in message
news:70415907-23fe-4b2c...@googlegroups.com...
> What does gamblers in general performing tax shenanigans have to do with
> letting those who itemize combine their losses and gains for the most
> risky bets ( like sports gambling , as opposed to stock option betting),
> while not allowing those who don't itemize the same benefit ?
>
Perhaps nothing, but when there are perceived problems, including some
> letting those who itemize combine their losses and gains for the most
> risky bets ( like sports gambling , as opposed to stock option betting),
> while not allowing those who don't itemize the same benefit ?
>
people being "too productive" or "too successful", THEY deal with the
"problem" via tax codes and regulations, many of which make no sense and are
even counterproductive.
xy...@hotmail.com
Apr 19, 2015, 1:15:03 PM4/19/15
to
>
> Leaving aside the other (correct) comments about how taking a standard
> deduction is actually a better deal tax-wise, are you correctly taking
> into account your basis in each wager when figuring your gross income?
>
>
> --
>
> Mark Bole, EA
> http://markboletax.com
The problem with figuring out my basis is that since I assumed I would be able to deduct losses up to the win amount, there was going to be a simple formula for me for tax purposes. I easily knew how much I put in the "bucket" (it's on the credit card statement), so I simply made note of my balance at year end and added back any pending bets (the house takes out the basis immediately upon bet placement). If the balance + pending bets was more than what I put in, I was going to pay tax on that difference.
Of course, what happened instead when I was confronted with the real rules was I had to go back and consider each individual bet. The ending balance told me nothing. I could have won $50,000 and lost $50,000 and I would have been paying taxes on the $50,000 since I don't itemize. It's kind of annoying but those are the rules and I'm going to follow the rules.
xy...@hotmail.com
Apr 19, 2015, 1:20:03 PM4/19/15
to
>
> Actually, you're wrong. You come out better by not owning a house. The IRS gives you a standard deduction whether or not you actually spend that money on deductible items. People who itemize must spend every dollar they claim as a deduction. Then they only get back a fraction of that expense at their marginal tax rate.
>
> Ira Smilovitz
If I were allowed to deduct my rent, which is about $1,000 / month, I would be better off itemizing than claiming the standard deduction.
> Actually, you're wrong. You come out better by not owning a house. The IRS gives you a standard deduction whether or not you actually spend that money on deductible items. People who itemize must spend every dollar they claim as a deduction. Then they only get back a fraction of that expense at their marginal tax rate.
>
> Ira Smilovitz
Now in some cases I get what you're saying. Say, for example, I still lived at home with my parents and paid no rent. Then the standard deduction is wonderful to have and helps me tremendously.
Mark Bole
Apr 19, 2015, 7:35:04 PM4/19/15
to
On 2015-04-19 10:15, xy...@hotmail.com wrote:
>
> Of course, what happened instead when I was confronted with the real
> rules was I had to go back and consider each individual bet. The
> ending balance told me nothing. I could have won $50,000 and lost
> $50,000 and I would have been paying taxes on the $50,000 since I
> don't itemize. It's kind of annoying but those are the rules and I'm
> going to follow the rules.
>
If you had $50K of gambling losses, you almost certainly *would* be able
>
> Of course, what happened instead when I was confronted with the real
> rules was I had to go back and consider each individual bet. The
> ending balance told me nothing. I could have won $50,000 and lost
> $50,000 and I would have been paying taxes on the $50,000 since I
> don't itemize. It's kind of annoying but those are the rules and I'm
> going to follow the rules.
>
to itemize, unless your AGI was a few million or so (in which case AGI
phaseout and AMT might negate any deduction, I haven't tried to figure
out the thresholds).
Along the lines of Art Kamlet's reply, see also IRS Notice 2015-21, in
which the IRS proposes a new gambling Safe Harbor to define a "session
of play" where you could at least net your wins and losses from a single
session.
Mark Bole
Apr 19, 2015, 7:45:03 PM4/19/15
to
On 2015-04-19 08:47, taxed and spent wrote:
> <xy...@hotmail.com> wrote in message
> news:70415907-23fe-4b2c...@googlegroups.com...
>> What does gamblers in general performing tax shenanigans have to do with
>> letting those who itemize combine their losses and gains for the most
>> risky bets ( like sports gambling , as opposed to stock option betting),
>> while not allowing those who don't itemize the same benefit ?
> Perhaps nothing, but when there are perceived problems, including some
> people being "too productive" or "too successful", THEY deal with the
> "problem" via tax codes and regulations, many of which make no sense and are
> even counterproductive.
I don't equate sports gambling to stock option transactions, although I
> <xy...@hotmail.com> wrote in message
> news:70415907-23fe-4b2c...@googlegroups.com...
>> What does gamblers in general performing tax shenanigans have to do with
>> letting those who itemize combine their losses and gains for the most
>> risky bets ( like sports gambling , as opposed to stock option betting),
>> while not allowing those who don't itemize the same benefit ?
> Perhaps nothing, but when there are perceived problems, including some
> people being "too productive" or "too successful", THEY deal with the
> "problem" via tax codes and regulations, many of which make no sense and are
> even counterproductive.
grant you they might seem similar in the end.
If you consider the history of the two activities under tax and other
laws, it seems our society at large agrees. After all, it wasn't that
many decades ago that almost all gambling in U.S. was considered illegal
in most places, except limited horse racing bets and the Irish
Sweepstakes (which was also horse racing, I think). Now about the only
limitation is that you are looking at some stricter tax rules for
deducting losses.
Stuart A. Bronstein
Apr 19, 2015, 8:25:03 PM4/19/15
to
Mark Bole <ma...@pacbell.net> wrote:
> If you had $50K of gambling losses, you almost certainly *would*
> be able to itemize, unless your AGI was a few million or so (in
> which case AGI phaseout and AMT might negate any deduction, I
> haven't tried to figure out the thresholds).
If someone has $50,000 of gambling losses, wouldn't that be enough to
> If you had $50K of gambling losses, you almost certainly *would*
> be able to itemize, unless your AGI was a few million or so (in
> which case AGI phaseout and AMT might negate any deduction, I
> haven't tried to figure out the thresholds).
claim that the person is a professional gambler (doing it part time)?
--
Stu
http://DownToEarthLawyer.com
xy...@hotmail.com
Apr 19, 2015, 10:05:04 PM4/19/15
to
> >
>
> If you had $50K of gambling losses, you almost certainly *would* be able
> to itemize, unless your AGI was a few million or so (in which case AGI
> phaseout and AMT might negate any deduction, I haven't tried to figure
> out the thresholds).
>
>
> Along the lines of Art Kamlet's reply, see also IRS Notice 2015-21, in
> which the IRS proposes a new gambling Safe Harbor to define a "session
> of play" where you could at least net your wins and losses from a single
> session.
>
>
> --
>
> Mark Bole, EA
> http://markboletax.com
Arthur Kamlet
Apr 19, 2015, 10:40:03 PM4/19/15
to
In article <XnsA481B04119D95s...@130.133.4.11>,
Stuart A. Bronstein <spam...@lexregia.com> wrote:
>Mark Bole <ma...@pacbell.net> wrote:
>
>> If you had $50K of gambling losses, you almost certainly *would*
>> be able to itemize, unless your AGI was a few million or so (in
>> which case AGI phaseout and AMT might negate any deduction, I
>> haven't tried to figure out the thresholds).
>
>If someone has $50,000 of gambling losses, wouldn't that be enough to
>claim that the person is a professional gambler (doing it part time)?
A profesional gambler has to spend most of his time gambling.
>Mark Bole <ma...@pacbell.net> wrote:
>
>> If you had $50K of gambling losses, you almost certainly *would*
>> be able to itemize, unless your AGI was a few million or so (in
>> which case AGI phaseout and AMT might negate any deduction, I
>> haven't tried to figure out the thresholds).
>
>If someone has $50,000 of gambling losses, wouldn't that be enough to
>claim that the person is a professional gambler (doing it part time)?
--
ArtKamlet at a o l dot c o m Columbus OH K2PZH
ArtKamlet at a o l dot c o m Columbus OH K2PZH
xy...@hotmail.com
Apr 20, 2015, 11:25:03 AM4/20/15
to
>
>
> I don't equate sports gambling to stock option transactions, although I
> grant you they might seem similar in the end.
>
> If you consider the history of the two activities under tax and other
> laws, it seems our society at large agrees. After all, it wasn't that
> many decades ago that almost all gambling in U.S. was considered illegal
> in most places, except limited horse racing bets and the Irish
> Sweepstakes (which was also horse racing, I think). Now about the only
> limitation is that you are looking at some stricter tax rules for
> deducting losses.
Mark Bole
Apr 20, 2015, 12:20:03 PM4/20/15
to
On 2015-04-20 08:21, xy...@hotmail.com wrote:
>
>
> Limited even moreso for certain people -- those who don't itemize.
It's obvious that the poorer a person is the less likely he is to
itemize. So I wonder if somehow this is meant to try to limit gambling
amongst the relatively poorer people in our country ? God knows they
could use the offset more than the wealthier folks. Of course, most
people probably aren't reporting gambling income that isn't reported to
the IRS.
>
Even "rich" people aren't allowed to deduct losses greater than
>
>
> Limited even moreso for certain people -- those who don't itemize.
It's obvious that the poorer a person is the less likely he is to
itemize. So I wonder if somehow this is meant to try to limit gambling
amongst the relatively poorer people in our country ? God knows they
could use the offset more than the wealthier folks. Of course, most
people probably aren't reporting gambling income that isn't reported to
the IRS.
>
winnings, in other words your gambling can't amount to a net deduction
against income, it's always going to be either net taxable income, or at
best, zero income. (There's still the fact that gambling income
increases AGI, while gambling loss deductions don't decrease AGI, and
high AGI can trigger all kinds of other tax implications).
I seriously doubt the intent of the tax law was to limit gambling (most
gamblers wouldn't care anyway is my guess), but simply to not reward
gamblers with a tax break. It's very similar to treatment of hobby
income, for much the same reason: it's recreational, not business-related.
Which links to the previous comment about whether $50K of losses would
mean someone is a professional gambler - no, it's not the dollar amount
by itself that matters. It's whether the activity is conducted as a
trade/business, or recreation/hobby.
And, to quote TheTaxBook (professional desk reference), "Regardless of
whether a taxpayer’s gambling activity is a trade or business, IRC
section 165(d) limits losses from gambling to the extent of gains from
such transactions. "
Alan
Apr 20, 2015, 2:15:04 PM4/20/15
to
On 4/19/15 7:04 PM, xy...@hotmail.com wrote:
>
>>>
>>
>> If you had $50K of gambling losses, you almost certainly *would* be able
>> to itemize, unless your AGI was a few million or so (in which case AGI
>> phaseout and AMT might negate any deduction, I haven't tried to figure
>> out the thresholds).
>>
>>
>> Along the lines of Art Kamlet's reply, see also IRS Notice 2015-21, in
>> which the IRS proposes a new gambling Safe Harbor to define a "session
>> of play" where you could at least net your wins and losses from a single
>> session.
>>
>>
>> --
>>
>> Mark Bole, EA
>> http://markboletax.com
>
> Ah yes, my mistake. Of course at $50,000 I could itemize. I should have typed $5,000, not $50,000. Interesting. I wonder how they define a "session." I will read it. Thanks.
>
If you want to understand the meaning of a session and tax law for
>
>>>
>>
>> If you had $50K of gambling losses, you almost certainly *would* be able
>> to itemize, unless your AGI was a few million or so (in which case AGI
>> phaseout and AMT might negate any deduction, I haven't tried to figure
>> out the thresholds).
>>
>>
>> Along the lines of Art Kamlet's reply, see also IRS Notice 2015-21, in
>> which the IRS proposes a new gambling Safe Harbor to define a "session
>> of play" where you could at least net your wins and losses from a single
>> session.
>>
>>
>> --
>>
>> Mark Bole, EA
>> http://markboletax.com
>
> Ah yes, my mistake. Of course at $50,000 I could itemize. I should have typed $5,000, not $50,000. Interesting. I wonder how they define a "session." I will read it. Thanks.
>
nonprofessional gambling you will need to read various tax cases that
have established the interpretation of Section 165. You need to start
with http://ustaxcourt.gov/InOpHistoric/SHOLLENBERGER.TCM.WPD.pdf and
then read the various cases cited in that decision.
--
Alan
http://taxtopics.net
bh2...@gmail.com
Apr 26, 2015, 8:15:03 PM4/26/15
to
On Friday, April 17, 2015 at 3:55:04 PM UTC-4, xy...@hotmail.com wrote:
> Since I don't own a home and don't itemize I am screwed this year. I forgot that the law mostly allows only those who own homes (let's be honest that's what makes most people able to itemize) to deduct the losses on their gambling income to offset the wins.
>
> So here's what happened: I made several bets on football games during 2014. I won about $300 or so. But with the winnings (without ever receiving a cent from the house) I bet on other football games that I lost. So in my "bucket" at the end of the year I had about $25. Add back pending bets as of year-end and I was left with maybe $100.
>
> So basically I have to pay taxes on all the winnings even if I never received a dime from the house! Yes, I got the benefit of extra bets with those wins but still sucks that mortgage holders and those who itemize get to deduct the losses and I don't basically because I rent.
Another horror of gambling winnings is the amount pushes up your taxable portion of social security benefits and if you don't itemize you really get screwed especially if you lost it all the next day. IRS wants to lower tax trigger to $600 on one slot pull from current $1200.
>
> So here's what happened: I made several bets on football games during 2014. I won about $300 or so. But with the winnings (without ever receiving a cent from the house) I bet on other football games that I lost. So in my "bucket" at the end of the year I had about $25. Add back pending bets as of year-end and I was left with maybe $100.
>
> So basically I have to pay taxes on all the winnings even if I never received a dime from the house! Yes, I got the benefit of extra bets with those wins but still sucks that mortgage holders and those who itemize get to deduct the losses and I don't basically because I rent.
bw
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