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Harve$t Moon

“How you do anything is how you do everything.”

United States
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July 10, 2009
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Nov 24, 2009, 11:47 pm

Do you keep a diary or record of your gambling winnings, losses and other expenses for your tax returns? *

I'm reading an excellent book by Ann-Margaret Johnston, CPA, titled

How to Turn Your Poker Playing Into A Business: Knowing What to Deduct to Improve Your Odds With the IRS. ISBN 0-9774862-0-6

I'm not interested in Poker. My lottery activities are a hobby for now.

I'm looking into the possibility of turning it into a home based business.

If I can turn it into a home based business, then there may be lots of deductions that I can claim against any winnings.

When the online gambling returns (soon ), I would like to get rolling with this idea.

*Most of us have anonymous identities here, so it is safe to discuss this subject. Non anonymous folks' input is valued as well.

We could list the types of deductions and expenses that may be considered for awareness in this thread. If there are any tax professionals in this forum, please stop by and give us some tips. Thanks.

Disclaimer: I am not a tax accountant or lawyer. Consult with your professionals for related questions or advice.
Delta Draw

United States
Member #81,841
October 31, 2009
856 Posts
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Nov 25, 2009, 8:52 am

Hey Harve$t Moon!

Sure,... I do keep daily records and bad bets. I don't want to look back and wish I had done that, if the event my winnings exceed my loosings. LOL Not having your losses well documented only adds to your losses if you win handsomely, and you can offset those losses from winnings so you only pay tax on the bottom line.* Why get taxed on money you spent to win?

I will have to ask my E.A. next year and get some coaching on taxes and business stuff. Just off the cuff, it might be a red flag for the IRS. Since there is no State tax here (Yippie), the business taxes are terrible and I hate extra paperwork, I think reporting wins on federal forms and offsetting losses is fine. Paying advance tax on speculation here for a business is a big pain in the you-know-what. For me, the idea of being retired with good cash flow is much more appealing than extra paperwork. I am sure there are pros who turn big dollars per week and it would be interesting how they look at the games and taxes. Sounds like an interesting book!

One thing for sure here, I want to honestly use the tax system and do not want to look over my shoulder for the IRS. I play by their rules, in their game. I just don't know all the rules yet except for the basics. Caesar can have what is due. If I don't keep records then Caesar can get more than his due by my stupidity. JMHO

DD

* see the IRS for your tax laws!
Stack47

Kentucky
United States
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February 14, 2006
10,302 Posts
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Nov 25, 2009, 9:08 am

Courts have ruled that poker is a game of skill and professional poker players can get business and occupational deductions. Whether or not the online gambling bill views online poker as a business or occupation is irrelevant because you're talking about other forms of gambling.

What is relevant, the whole point of legalizing online gambling is to tax winnings and the current IRS code only allows us to deduct up to the amount we won. So even if you actually believe you can show a profit playing the lottery online, there are no other current deductions. If you're thinking about turning your home into an online gambling establishment, you should check your state and local laws or your home might become property of your state or of your city.
recoveryroad

South Florida
United States
Member #82,130
November 6, 2009
112 Posts
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Nov 25, 2009, 11:21 am

The free lottery software I use has a space for entering in your ticket purchases for each day (or week)...and yes, I've kept track of everything so far this month. Right now I'm down about $100 for November in my pick 5 game...but hey, being down $100 for the month doesn't mean a whole lot to someone who's been down several thousand in the stock market in a month..
Harve$t Moon

“How you do anything is how you do everything.”

United States
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July 10, 2009
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Nov 25, 2009, 11:54 am

Quote: Originally posted by Stack47 on Nov 25, 2009
Courts have ruled that poker is a game of skill and professional poker players can get business and occupational deductions. Whether or not the online gambling bill views online poker as a business or occupation is irrelevant because you're talking about other forms of gambling.

What is relevant, the whole point of legalizing online gambling is to tax winnings and the current IRS code only allows us to deduct up to the amount we won. So even if you actually believe you can show a profit playing the lottery online, there are no other current deductions. If you're thinking about turning your home into an online gambling establishment, you should check your state and local laws or your home might become property of your state or of your city.

Thanks, Stack47, for your comments!

My home will never become an online gambling establishment. No way, no how, NEVER NEVER NEVER!!! My home based business will be a sole proprietorship business with no clients, customers, employees or the like.

Right now, I play PA, NJ and DE lotteries primarily, because I can't play online. Although I do have family in Europe, I would NEVER ask them to register me or themselves for the services of the current online gambling sites. Sometimes, I visit the casinos in Atlantic City. Most often when I travel through the states, I will play those lotteries.

When online gambling becomes legal, I will play with the wider scope of possibilities. It is my intention to play daily and often enough to establish myself as a Professional Gambler. With gambling becoming my primary source of income AND with my INTENTION to make BUSINESS PROFITS, I believe that I can argue for fuller IRS privileges.

My support will be the business' detailed record keeping.

Lottery gambling is also a game of skill, otherwise, all the system players are wasting their time with system gambling. All the mathematical experts are wasting their time with the logics of mathematics and numbers. It is both an ART and SCIENCE. I believe that LotteryPost.com would not have its long running and tremendous success, if there were no skilled players in its forum. The skilled players help make a strong LotteryPost.com foundation. (I am not addressing the luck factors in my reply to you.)

Deductions up to the amount of winnings is helpful, especially against some big WINS! I will take what I can get!

As I mentioned in my original post, I am not interested in Poker or Online Poker. However gambling IS gambling. If it is presented seriously, supported by enough plays and ACCURATE record keeping, then it can be challenged in the courts (if necessary for its rulings). Addressing challenges and clarifications are among the purposes the court system.
takeitez

Carters Lake, Ga.
United States
Member #5,313
June 29, 2004
1,065 Posts
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Nov 25, 2009, 12:18 pm

Write (not print) your name on the back of each ticket you buy.

File by the amount spent on each ticket.

When the time comes you will be ready.

ez

........ in the long run........
hennybogan

McKinney/Texas
United States
Member #47,362
November 1, 2006
708 Posts
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Nov 25, 2009, 12:42 pm

Lots of luck trying to make money in the lottery.

You can only claim deductions equal to your winnings.

For that reason I save all of my Pick 3, Pick 4, and scratch offs.

Back in 2006, I won $660 on one Pick 3 ticket, and had to pick up a check

from the Texas Lottery Commission, after completing an IRS FORM.

Later in 2007, I filed my taxes using H&R Block. I wanted to claim all of my tickets,

but I was told you can only claim as much as you won. In other words, a "PUSH".

If gambling is your only source of revenue, it might be different.

Ephesians 3:20
ThatScaryChick

Idaho
United States
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November 21, 2007
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Nov 25, 2009, 1:24 pm

"Do you keep a diary or record of your gambling winnings, losses and other expenses for your tax returns?"

Nope.

"X - youtube - steam - instagram"

ThatScaryChick
RJOh

100

mid-Ohio
United States
Member #9
March 24, 2001
20,272 Posts
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Nov 25, 2009, 2:12 pm

You can only claim deductions equal to your winnings.

Also those loses and others (interest on loans and etc.) have to exceed the standard deduction allowed for losses in general. I once won $1500 for matching 5/6 in a 649 game and spent $3000 on lottery tickets that year but my other losses and the $1500 of lottery loses I could claim didn't exceed the standard deduction of $4500 so I ended up paying ~$300 more in taxes for the $1500 increase in my income. You got to win a lot and lose a lot to use that tax law.

* you don't need to buy every combination, just the winning ones *
KY Floyd

NY
United States
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October 16, 2005
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Nov 26, 2009, 3:44 am

"I believe that I can argue for fuller IRS privileges."

Of course you can argue, assuming you're willing to spend lots of money for a lawyer. I hope you don't actually think you'll win.

"My support will be the business' detailed record keeping."

Detailed records are meaningless for supporting deductions that aren't allowed, or trying to claim that a hobby is really a business.

"Lottery gambling is also a game of skill, otherwise, all the system players are wasting their time with system gambling."

That's like saying the sun isn't going to come up tomorrow, otherwise life will go on as normal. Some gambling decisions are less intelligent than others, but that doesn't make lotteries a game of skill. Lotteries are games of chance with results that are random. Convincing the IRS otherwise isn't any more likely to work than convincing the patent office to grant you a patent for a perpetual motion machine.
truecritic

Michigan
United States
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September 24, 2005
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Nov 26, 2009, 8:59 am

"When online gambling becomes legal, I will play with the wider scope of possibilities. It is my intention to play daily and often enough to establish myself as a Professional Gambler. With gambling becoming my primary source of income AND with my INTENTION to make BUSINESS PROFITS, I believe that I can argue for fuller IRS privileges."

If your a pro, you register with the IRS and then you can deduct expenses. Not sure what the procedure is or what it costs.
rcbbuckeye

100

Texas
United States
Member #55,887
October 23, 2007
17,767 Posts
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Nov 26, 2009, 9:11 am

I have kept a spreadsheet for the last 5 years of what I played on each game, won and lost. I keep it by month and total it at the end of the year. I do it more so to keep track of wins and losses and how much I spend rather than for tax purposes. Unfortunately, I lost most of my files due to a computer virus this year, so all I have is records for this year.
Harve$t Moon

“How you do anything is how you do everything.”

United States
Member #76,984
July 10, 2009
10,763 Posts
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Dec 22, 2009, 7:07 pm

Thanks, Everyone, for your suggestions and comments! They are appreciated!

Happy Holidays!!!