I keep getting conflicting info from various tax pros as to how we are suppose to keep our win/loss records. Does a player have to be a "pro" to claim losses? Can someone shed some light on the subject please?
<< I keep getting conflicting info from various tax pros as to how we are suppose to keep our win/loss records. Does a player have to be a "pro" to claim losses? Can someone shed some light on the subject please? >>
There's lots of good information out there. Try the free Law & Taxes information section here, the Law & Taxes Green Chip board, Two Plus Two, and published books. The topic's a complicated one. You don't have to be a pro to deduct losses, but there are very unfavorable restrictions on deducting losses, starting with the fact that unless you already have enough other deductions to itemize deductions, you'll in effect have a big chunk of losses off the top that you get no tax benefit from deducting. The tax laws of some states are even worse, like being put in some medieval torture chamber.
But to respond to your point about getting conflicting advice, I'm not surprised. IMHO, tax law on gambling income is a complete muddle, to the point that even the IRS doesn't have a coherent theory on how it should be taxed. The decision on which winning and losing bets can be netted out--not at all, over the course of one session, or over some other period--is inherently arbitrary. We know that it's really all one big game, even if you take breaks to eat and sleep. The people that wrote the laws don't understand how wins and losses inevitably go hand in hand. In many cases, on supposed moral grounds, they are very hostile toward the idea of anyone making a living from gambling. So they consciously set out to punish you. Of course, that doesn't go for the big businesses that own casinos. Only for individuals.
Here is something I found that is potentially disturbing to me. Maybe I don't really understand it properly though.
The law does allow players to take gambling losses off their taxes, but only up to the amounts of their winnings. Professional gamblers hold file as a self-employed business using Schedule C.
