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Posted by Mark Bole on August 18, 2007, 11:28 pm
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Seth wrote:
> What if I make a deal with a casino, where I hand them
> $7,000 and the terms are: "If A and B win, I get $14,000.
> If A wins and B loses, I get $10,000. If B wins and A
> loses, I get $4,000. If A and B both lose, I get $0."
> Sure, that looks like a $5,000 bet on A and a $2,000 bet on
> B, but it's really one more complicated bet.
The $7,000 deposit you made, and the lack of same by the
casino, is irrelevant. You have broken out all the possible
outcomes of two separate bets in one statement, but doing so
does not merge them into a single bet.
Bets can be bundled -- you won't make any of them unless you
make all of all, or one bet is contingent on the outcome of
a prior bet -- but they are still separate bets. I argue
that every time it's your turn to put money in the poker
pot, you are making a new, separate bet with each individual
at the table. This would truly be a record-keeping
nightmare.
Now, people who actually play poker may not see it this way,
and as a practical matter, the tax people probably don't see
it this way. I assume they would be glad if anyone reported
any of their private poker winnings on any significant
scale.
[...]
> There's also precedent that if you walk into a casino, buy
> $10,000 worth of chips, gamble for a while, and cash out
> $30,000 worth of chips and leave, you have $20,000 gross
> winnings (as the W2G form the casino gives you will assert),
> not maybe $120,000 gross winnings and $100,000 gross losses.
> So if you play poker for chips, why shouldn't the same
> apply?
If your poker buddies issued you W2-G statements, I think
the IRS would be happy with that number.
-Mark Bole
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Posted by Seth on August 20, 2007, 7:30 pm
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> Seth wrote:
>> What if I make a deal with a casino, where I hand them
>> $7,000 and the terms are: "If A and B win, I get $14,000.
>> If A wins and B loses, I get $10,000. If B wins and A
>> loses, I get $4,000. If A and B both lose, I get $0."
>> Sure, that looks like a $5,000 bet on A and a $2,000 bet on
>> B, but it's really one more complicated bet.
> The $7,000 deposit you made, and the lack of same by the
> casino, is irrelevant. You have broken out all the possible
> outcomes of two separate bets in one statement, but doing so
> does not merge them into a single bet.
What if the deal cannot be decomposed? "If they both win, I
get $10,000. If one of them wins, I get $2,000. If neither
wins, I get $0."
Seth
<< ------------------------------------------------------- >>
<< 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 (2006) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by Dick Adams on August 20, 2007, 7:30 pm
Please log in for more thread options Seth wrote:
> What if I make a deal with a casino, where I hand them
> $7,000 and the terms are: "If A and B win, I get $14,000.
> If A wins and B loses, I get $10,000. If B wins and A
> loses, I get $4,000. If A and B both lose, I get $0."
> Sure, that looks like a $5,000 bet on A and a $2,000 bet on
> B, but it's really one more complicated bet.
If casino issues you a 1009-G, the expected outcomes are:
A B 1099-G
- - ------
Y Y $ 7000
Y N 3000
N Y (3000)
N N (7000)
Talk with an accountant at a casino and find how 1099-G
amounts are determined.
<< ------------------------------------------------------- >>
<< 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. >>
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Posted by Geoff on August 13, 2007, 10:23 pm
Please log in for more thread options > Taxpayers are expected to keep track of hundreds of
> individual business auto trips or meals, why should poker
> hands be any different?
I would be willing to bet, except for a few professional
gamblers, that nobody actually does this. If they have a
record, it is probably something they dummied up afterwards.
What would the harm be in taking the net of winnings minus
losses? Taxwise it would come out the same (wouldn't it?)
and it wouldn't encourage/force people to lie on their tax
returns.
I don't gamble, so it is a moot point for me personally; I
just think that encouraging fraud is bad practice. If they
have to lie about this, it is a small step to lying about
otherthings. A gateway lie, if you will.
<< ------------------------------------------------------- >>
<< 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. >>
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Posted by Mark Bole on August 18, 2007, 11:28 pm
Please log in for more thread options Geoff wrote:
>> Taxpayers are expected to keep track of hundreds of
>> individual business auto trips or meals, why should poker
>> hands be any different?
[...]
> What would the harm be in taking the net of winnings minus
> losses? Taxwise it would come out the same (wouldn't it?)
> and it wouldn't encourage/force people to lie on their tax
> returns.
No, taxwise it's the difference in Adjusted Gross Income
(AGI) that is at issue.
Putting gross winnings in AGI helps set certain other limits
in many places throughout the tax return. Even with equal
net incomes, the return with the higher AGI will most likely
end up paying more tax.
-Mark Bole
<< ------------------------------------------------------- >>
<< 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 (2006) - All rights reserved. >>
<< ------------------------------------------------------- >>
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