unJon
unJon
Joined: Jul 1, 2018
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February 2nd, 2019 at 8:22:35 AM permalink
Quote: FinsRule

Are there any potential benefits to having an inflated agi?

You get to be a baller.
The race is not always to the swift, nor the battle to the strong; but that is the way to bet.
BV3273
BV3273
Joined: Jan 31, 2019
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Thanks for this post from:
MichaelBluejay
February 2nd, 2019 at 8:23:05 AM permalink
I think if youíre going for certain types of loans.
gordonm888
gordonm888
Joined: Feb 18, 2015
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February 2nd, 2019 at 8:30:40 AM permalink
Quote: BV3273

I live in NY and played on my phone while on vacation in NJ. Iím printing out all of these records (158 pages in all) just in case I need to document any of this to the IRS in the future (hopefully not).

Iím not really sure of the implications on the state. All of the accountants said Iíd have to file an out of state in NJ.



Does this mean that if we have gambling winnings in Las Vegas, that we do not need to report those winnings on our state income tax forms for our state of residence? (Nevada has no state income tax)

If I get a cash payout in a poker tournament in North Carolina (which is not where my residence is), am I required to file an out-of-state income tax form in North Carolina?
Sometimes, people are just a bottomless mystery. And, after all, this is just a sh*tty little forum in the sun-less backwaters of the online world.
unJon
unJon
Joined: Jul 1, 2018
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February 2nd, 2019 at 8:33:14 AM permalink
Quote: gordonm888

Does this mean that if we have gambling winnings in Las Vegas, that we do not need to report those winnings on our state income tax forms for our state of residence? (Nevada has no state income tax)

If I get a cash payout in a poker tournament in North Carolina (which is not where my residence is), am I required to file an out-of-state income tax form in North Carolina?



I can only speak for NY. You would report it as income in NY, but you also get a credit for taxes paid on income earned in other states. So, in your example, you donít get any credit because Nevada has zero taxes.
The race is not always to the swift, nor the battle to the strong; but that is the way to bet.
BV3273
BV3273
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February 2nd, 2019 at 8:45:06 AM permalink
I agree with unJon
MichaelBluejay
MichaelBluejay
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Thanks for this post from:
CrystalMath
February 2nd, 2019 at 8:56:27 AM permalink
Thanks to CrystalMath who woke me up about inflated AGI resulting in limited deductions. I did have a small bit about that in the article, but I somehow spaced out that the ramifications of that were pretty big. As a result, I just now overhauled the article, rewriting the first two sections, and adding a new section, "What to do with W-2Gs". Previously, my advice had been to always use session accounting, because that's what's proper, but now my conclusions are different. I'd summarize here but it's a big issue, and subject to further revisions, so please see the article for all the details. Please let me know if it seems I got anything wrong, or if anything's unclear, or if anything's missing (except state taxes, which are beyond the scope of my article).
Last edited by: MichaelBluejay on Feb 2, 2019
ChumpChange
ChumpChange
Joined: Jun 15, 2018
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February 2nd, 2019 at 9:04:37 AM permalink
I saw a YT video of a BJ player playing online for $5K to $10K per hand a little while back. He turned his low of $10K into $180K in a one day session. I can't imagine what that tax situation looks like. Since he was jumping from table to table pretending to be counting cards, does every table hop count as a session; or does one day online playing basically the same game count as a session? He may have left the US on vacation to play online to avoid taxes though.

Anyway, the OP has a $318K W-2G to declare a loss on with easy casino printouts of the day. It's probably gonna take a court case to use a gambling log of all year's gambling to write off $3 million. The IRS is heavily weighted towards W-2G's. It seems to be an exception to the rule to bring 99 days of non-W-2G activity into the purview of the one day you had W-2G activity. I'd avoid W-2G's like the damn plague, unless there was an upside, like winning big really fast in one day.
MichaelBluejay
MichaelBluejay
Joined: Sep 17, 2010
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February 2nd, 2019 at 9:06:05 AM permalink
Quote: BV3273

Correct. My account stated that I should report the $318k W-2G total as a win on Schedule 1 Line 21, and a $318k loss on Schedule A. I am going to lose certain deductions such as medical bills, student loan interest,
etc. Iím fine with losing these deductions as long as it doesnít result in further complications down the road.

It's totally your call, but there's no way I would pay taxes that I don't owe just to avoid getting a letter from the IRS which I could easily clear up by sending back a letter of my own. Heck, if you include an explanatory note with your return, you're unlikely to get such a letter from the IRS in the first place.

I've got a lot of experience with the IRS. I stopped paying taxes during the first Gulf War because I didn't want my tax money being used to kill people. I kept that up for ten years. Once I started making serious money that wasn't going to fly any more, so I settled. I never met an IRS agent, it was rather painless.

Since then, a couple times in my life I got behind on filing returns, I mean like *years*, and an IRS agent visited me each time to inquire about when I'd be able to file. No weaponry, no threats, nothing unpleasant. Each time I gave a good-faith estimate on when I'd be able to file, the agent left, then it actually took me long after my estimate to actually file (several weeks in the first case, maybe a year in the second case), but neither time were there any more visits.

Twice the IRS assessed extra taxes incorrectly. Each time I replied with a simple letter explaining how my reporting was correct, and that satisfied them completely.

In my mind, fear of the IRS is way overblown. As long as you're not cheating, you have little to worry about.
MichaelBluejay
MichaelBluejay
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February 2nd, 2019 at 9:08:06 AM permalink
Quote: ChumpChange

...does every table hop count as a session; or does one day online playing basically the same game count as a session?

I refer you to my article.
DRich
DRich
Joined: Jul 6, 2012
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February 2nd, 2019 at 9:18:25 AM permalink
You need to pay state taxes in the state you reside. In some states they withhold taxes at the time of a W2G. In those states you can file a state return to potentially get back some of the withholdings.
Living longer does not always infer +EV

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