06-20-2015, 09:28 PM
(06-20-2015, 08:02 PM)michaelsean Wrote: Yeah I would double check with the tax man. The govt may owe you some money.
I have a hard time believing you think it should be taxable if you you lose $8000 because in the middle of losing 9 hands you win one.
Correct. You file a form (forget which one) for winnings over $1000 or thereabouts. However, this does not prevent you from offsetting losses up to the amount of your winnings. Of course if you happen to get audited you may have difficulty "proving" your losses (a tournament receipt is easy, but in most other cases you don't have much). But generally the IRS doesn't bat an eye over nominal winnings offset by losses...but if you've won $5k+ you've offset you definitely want to have records.
And there's no way for the IRS to track winnings on individual hands. You can win $5k playing poker and nothing even gets filed. You only have to fill out the IRS form, generally, for tourney winnings or slot jackpots.
The hobby argument is a non-starter, because without income (i.e. losses > than winnings) there's no tax liability. If you have income, as with most anything, you have a tax liability. It doesn't matter if it's from a hobby or not. The only difference is you don't get to offset other income, or carry losses forward, with expenses/losses from a hobby. That's different from a professional gambler, who has detailed records and, presumably, has taxable income more years than not. So the amateur/hobbyist who has net winnings of $10k one year pays taxes, even if he lost $20k the prior year.
