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FCBLComish
FCBLComish
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December 13th, 2018 at 11:07:42 AM permalink
Quote: AcesAndEights

Quote: Gialmere

How often is the $1200 changed? Is it pegged to inflation? I'd like to see it raised to $2500 which seems fairer and easier although it's hardly surprising that Uncle Sam doesn't share that view.

[On a side note, it's really cool seeing Michael Bluejay post here. I came here via Vegas Click which is a great site for guys like me just getting back into casino gaming--lots of nice examples of play.]


It's not pegged to inflation, but it absolutely should be. I don't know when the $1200 was written into law, but ChumpChange's post above implies it was at least as early as 1978.



It has been $1200 for the entire time I have been in the casino business. It is long overdue for a change. Trouble is, they were talking about LOWERING the number last year...

https://www.cpapracticeadvisor.com/news/12299406/irs-finalizes-reporting-rules-for-certain-casino-games

That is completely ridiculous. $2500 or even $5000 is probably the right amount.
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billryan
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December 13th, 2018 at 11:12:20 AM permalink
I'm sixty, and it seems to me that the $600-1 tax has been around forever. As a kid, I remember there were always a few old guys hanging out that cashed OTB tickets for people. I think the OTB opened around 1975.
beachbumbabs
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December 13th, 2018 at 4:32:52 PM permalink
Quote: AcesAndEights

Yes, I agree that would be reasonable. While we're at it, I would like a pony for Christmas!


The new part this year is that non-pros can deduct expenses other than losses, e.g. airfare, hotels, etc. Still can't exceed wins though, and you still have to itemize. Won't be a huge impact on non-pros, but if this were in place a couple of years ago, it would have benefited me. I declared everything properly for an amateur, gross session wins on 1040 and gross session losses on Schedule A. I don't remember what the net ended up being, but it was in the range of a few thousand for a couple of years. If I could have added my airfair to Vegas and hotel costs, in addition to my bus fare or car mileage to the local casinos in Seattle, it would have knocked down that net a bit more.



Would have been a huge help to me, as well. But not this year, unfortunately.
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MichaelBluejay
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RogerKintJoeman
December 13th, 2018 at 5:06:27 PM permalink
Quote: FCBLComish

That is completely ridiculous. $2500 or even $5000 is probably the right amount.

They shouldn't raise it, they should *abolish it completely*, for two reasons:

(1) The W-2G bears no resemblance to what you actually report on your tax return.

(2) All the gambling done by all taxpayers each year results in a net LOSS. There is no real net income to be taxed. Gambling wins shouldn't be taxed, at least not unless they let you *really* deduct *all* your losses, in excess of the standard deduction. But even if they did that, W-2G still has no relation to what you report, so W-2G shouldn't be issued. Complete waste of time.

Oh, and good to see you here, Gialmere! I don't post on WoO very much, but sometimes I pop up when I see I can answer a question or correct a misconception.
Wizard
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December 13th, 2018 at 5:14:24 PM permalink
Quote: MichaelBluejay

Uh, not exactly. You don't declare your net profit, and my article makes that clear. You report your total wins as income in one place ("wins" being the sum of all winning sessions), and, if you itemize, all your losses in another place ("losses" being the sum of all losing sessions). Whether or not you received W-2Gs is irrelevant, since those amounts aren't used for tax purposes. For that reason, the IRS ought to stop requiring casinos to hand out those completely worthless forms.



That's true and practical for machine players who get a lot of W2Gs. I was thinking more like a table game player who doesn't get any. I don't think it would break any rules to just state you net annual win as the win and offset nothing against it. Otherwise, exactly how is a win defined, each winning hand, session, day?
It's not whether you win or lose; it's whether or not you had a good bet.
MichaelBluejay
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December 13th, 2018 at 5:54:09 PM permalink
Quote: Wizard

That's true and practical for machine players who get a lot of W2Gs. I was thinking more like a table game player who doesn't get any. I don't think it would break any rules to just state you net annual win as the win and offset nothing against it. Otherwise, exactly how is a win defined, each winning hand, session, day?

I think you need to read my article. IRS rules are clear that you can't just report the net, wins and sessions are actually defined (at least enough to give you an idea of how to record your journal), and my article addresses all of this.
Last edited by: MichaelBluejay on Dec 14, 2018
TomG
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Lottoballs
December 13th, 2018 at 6:11:27 PM permalink
Quote: MichaelBluejay

Quote: Wizard

That's true and practical for machine players who get a lot of W2Gs. I was thinking more like a table game player who doesn't get any. I don't think it would break any rules to just state you net annual win as the win and offset nothing against it. Otherwise, exactly how is a win defined, each winning hand, session, day?

I think you need to read my article. IRS rules are clear that you can't just report the net, wins and sessions are actually defined, and my article addresses all of this.



If a blackjack player did just report their entire year of blackjack winnings as one single integer and not itemized, what could the IRS possibly do to correct the error?
TomG
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December 13th, 2018 at 6:14:29 PM permalink
Quote: MichaelBluejay

Well, if you like that, then you'll like this one. I didn't add it to the page because I didn't want to clutter it:

Gambling wins shouldn't be taxable at all, not because I think taxation is inherently evil (I don't), but because gambling is an overall expected loss, so there's no overall profit. Consider all the gambling done by all Americans over the course of a year: casino, sports, lottery, etc. The grand total is a loss for the players, and a profit for the operators. So where's the income to tax?!

This is true even for the multi-state lotteries with jackpots of hundreds of millions of dollars. If the government wants to tax those winnings, then to be fair they'd need to allow players to FULLY deduct their lottery losses, (1) even in excess of winnings, and (2) in excess of the standard deduction, because if you don't get to deduct in excess of the standard deduction, then you don't really get a tax benefit. Meaning, someone who never plays the lottery gets the same standard deduction as someone who does, so lottery players effectively don't get a tax benefit on their losses, but winners get a tax bill on their wins. Not fair.



Absolutely agree that taxing gambling wins is double taxation. The problem is that gambling itself is a tax against people who don't understand math. So the vast majority of victims of this tax will never understand why it is wrong
Fleaswatter
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MichaelBluejay
December 13th, 2018 at 6:29:37 PM permalink
Quote: Wizard

That's true and practical for machine players who get a lot of W2Gs. I was thinking more like a table game player who doesn't get any. I don't think it would break any rules to just state you net annual win as the win and offset nothing against it. Otherwise, exactly how is a win defined, each winning hand, session, day?


Quote: MichaelBluejay

I think you need to read my article. IRS rules are clear that you can't just report the net, wins and sessions are actually defined, and my article addresses all of this.


I am only going to try to address "session" here.
From Mr. Bluejay's link:, I quote:
Quote:

The IRS doesn't explicitly define what a "session" is, so just use a reasonable definition. When you take a break for a meal or some other kind of entertainment, or when you cash in your chips, consider your session over. It's not clear whether you have to consider your session over if you simply switch games (e.g., slots to blackjack), or if you walk 30 seconds from one casino to the next (like in downtown Vegas where they're close together), but it couldn't hurt. You can have multiple sessions in one day, but a session can't span more than a day.



In 2015, the IRS was proposing changes to the reporting requirements for Winnings From Bingo, Keno, and Slot Machines. In this proposed change, the IRS defined session as the following;

Quote:

Session.
For purposes of this section, a session of play begins when a patron places the first wager on a particular type of game at a gaming establishment and ends when the patron places his or her last wager on the same type of game before the end of the same calendar day at the same gaming establishment. For purposes of this section, the time is determined by the time zone of the location where the patron places the wager. A session of play is always determined with reference to a calendar day (24-hour period from 12 a.m. through 11:59 p.m.) and ends no later than the end of that calendar day. Nothing in this section prohibits a payor from terminating a session for any reason before the end of that calendar day.



These proposed IRS rules were never adopted but will give you an indication about the IRS's thinking with respect to "sessions".
Last edited by: unnamed administrator on Dec 14, 2018
new motto for the left: I don't know if I received bad information, but I think I suspected there was more than there actually was, (John Brennan Mar 25, 2019)
Wizard
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MichaelBluejaydarkozLottoballs
December 13th, 2018 at 7:49:26 PM permalink
Quote: MichaelBluejay

Uh, not exactly.



Well, how should I put this? In my 17 years living Vegas and 32 in and out of casinos, the number of times I've seen somebody step away from a gambling table and write in a journal something, presumably his win/loss, casino, table number, companions, and time of day, is zero. However, I don't dispute what you site as the law.

The two of us exempted from this statement -- let the record say.
It's not whether you win or lose; it's whether or not you had a good bet.

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