Eilert Pilarm, on Jan 21 2004, 10:30 AM, said:
How Much Do You Think Mike Won?
Posted 21 January 2004 - 11:14 AM
Posted 21 January 2004 - 02:03 PM
To answer some of the questions about how much was withheld, etc.,
THE BASICS OF THE GAMBLING TAX LAWS
. . . The IRS form W2-G is issued to players and is also sent to the IRS by the casino for certain gambling winnings:. . . (2) winnings of $1,200 or more from bingo and slot machines; . . .
If Mike were my client, I would have him compile ALL his records of ATM withdrawls, etc., from ALL his 2004 trips to Vegas, Atlantic City, etc., since you can write off your gambling losses (only) up to the amount of your winnings.
Lets say he'll blow $50,000 for the whole year and has won (on W-2G forms only) $100,000 - he only has to declare the difference and be taxed on the difference. Mind you he'll probably have to have Fed taxes taken out at the time he won, but when he files his '04 tax return, it'll all be taken into account. The good news for Mike is that there is no wage cap on gambling, ie if he made $300,000 or $3 million in 2004, he is still allowed to take losses (only) up to his winnings to help mitigate the taxable gambling income.
*this $.02 is not meant to used for any particular person's tax situation. It is advised that you seek out your OWN information from a paid professional tax advisor*
Posted 21 January 2004 - 03:01 PM
* this $.02 is not meant for any particular tax-dodger's situation. It is advised that you seek out your OWN information from a paid professional gambling advisor*
Posted 21 January 2004 - 03:18 PM
I think on-line gambling ought to fix that, since they should be able to record what you spent and what you won...
Posted 21 January 2004 - 03:20 PM
tls11823, on Jan 21 2004, 12:01 PM, said:
this $.02 is not meant for any particular tax-dodger's situation.
The IRS requires that an accurate diary or similar record must be maintained for substantiating your wins and losses, and that the diary should contain at least the following information: (1) the date and type of your specific wager; (2) the name of the gaming establishment; (3) the address or location of the gaming establishment; (4) the names of the other person(s), if any, present with you; (5) the amount(s) you won or lost.
The IRS also requires that in order to substantiate your diary, supplemental records are required, including the following (these records are not to be submitted with your return, but will be needed should you be audited): (1) W-2Gs; (2) wagering tickets or receipts; (3) canceled checks; (4) credit card records such as cash advances; (5) bank withdrawals; (6) any receipts provided by the gambling establishment.
Yes, it sure wouldn't hurt to keep ALL your withdrawl/cash advance receipts when in a gambling town, but it's not the ONLY substantiation required by the IRS (see above).
Trust me, it's easy enough to *come up* with this information if needed.
Most casinos now offer 'gaming cards' that you insert into a machine while playing and it keeps track of your gaming activity (it's also another way how they determine if you're eligible for comps too, FYI). Back when I lived in Reno, the beauty of the gaming card was that it only recorded how much you gambled but not WHO'S money you were gambling with - example: I plug in $100 in a quarter video poker machine and hit 4 Aces for $200. I keep playing on the casino's dime, for hours, winning, losing, but still playing on their money. I cash out my original $100 investment, yet I've gambled (approximately) $300 on THEIR dime, thus showing a gambling loss of $300. It's a beautiful was to have a loss on *paper*.
*the above information is in no way intended to help cheat the IRS. Please see tls11823's paid professional gambling advisor for that *
Posted 21 January 2004 - 04:06 PM
I'm only an occasional gambler, and I'm not about to bring a log book along every time I go to the track or a casino. Somebody that is hooked on gambling, or thinks it's a way to generate supplemental income, isn't likely to write all that stuff down either.
I understand that they're trying to apply the same principals as with anybody else that makes a buck - if you have expenses, they're part of the cost of doing business. I'd imagine that the price of a bus ticket to Atlantic City would count. But this is gambling, not a form of doing business. The way professional gambling institutions are structured, you're going to lose way more than you win.
The solution? Only participate in illegal gambling. That way there's no record, and nobody involved will be running to the IRS. You're also not playing against the house, just other schmucks that think they know how to play cards or pick a winning football team.
* OK, this may not be considered sound financial advice, either. Use at your own risk. *
Posted 22 January 2004 - 10:20 AM
Posted 29 January 2004 - 07:04 PM
Posted 29 January 2004 - 09:28 PM
Mike playing $25 slot machines makes him a big roller. $50 a pull on slots is a lot more than playing the $25 table in blackjack because you can get at least 5-10 pulls I think in the time it takes for a blackjack hand to complete on a full table.
He must get lots of comps for his play, probably free room and travel too. We already know that because he has Jaquiline Vahhgas in Vegas. So betting that big, and making several trips a year makes me believe he could still be losing money despite the big win. Hope he keeps records.
And April, if you get every thing comped (meals, lodging, travel, golf, room, etc.), I assume you have to pay tax on that too?
Mike should play Reno instead. I think the payoffs are better here on slots and the scenery is much better than Atlantic City or Vegas. We don't have the mega-casinos, but still have some pretty nice ones. Blackjack rules are better than Atlantic City, but not as good as some places in Vegas. But some casinos here will let you play with Vegas rules.