Irs Gambling Sessions
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There are plenty of reasons why you should keep a gambling diary or gambling log, but the best reason of all is simple—the IRS would be very unhappy if they decided to audit you and found out you didn’t have one. A gambling diary, also known as a gambling log, is simply a written account of your wins and losses when you gamble. . No play 'exploratory' expeditions to casinos. General 'junk' you'd find in any AP notebook/diary. Technically, You could deduct the $15 as a tax preparation expense;) CTR are filed by casinos with the IRS. If you check to website of most casinos, they have online win/loss statement requests. Enter gambling sessions. The IRS in 2008, and later clarified in 2015, created rules for deducting gambling losses called gambling sessions. The idea was a gambling win wasn’t really a true win until the session was completed.
and it helped somewhat. Here is my scenario...
I do 'work part time', and as far as taxes go for that, I have a solid understanding. What is new is the w2g and logging my gambling wins/losses... I play poker 'semi-professionally' and am amping my play up much more this year (including travel to LV, AC, etc...) I log every session within an app on my iphone called Poker Journal.
It logs the following: start date, start time, end date, end time, break time, play time, game (stake, limit type, & game), location (casino), bankroll, initial buy-in, rebuy count, rebuy total, tokes(given to dealer(s)), tips (for cocktails, drinks, food, etc), cashed out amount, net profit, gross profit, net hourly rate, and even players.
So this is the software I use to log my play, it is pretty solid and has basically everything I need. I even thought I can possibly add a custom field and put the dealer that is in the box when I sit down (possibly with their gaming badge number) and the dealer that is there when I leave, and/or the cashier that cashes me out.
I think I have everything that IRS requires for a gambling log. (According to page 12 of IRS publication 529)
When I play poker tournamets, I get a buy-in receipt and when I lose I have that for my records, and when I win, they also give a recepit of winnings. So for tournaments I am not too worried. The poker room supervisor will usually sign and another casino employee will also sign and both verify the payouts along with their gaming badge numbers. I think that is enough for providing a 'witness' sort of speak, if I dont have the payout recepit of winning, I have the buy-in receipt to report that tournament a loss.
What my question is how this 'honor system' works for 'table games' as when I play poker at a live cash game, this is considered a table game and no one really keeps track of wins/losses other than the player (if they choose to). This app I uses has an export function so I can convert everything to Excel and/or other like programs. So is this information I log suffeciant enough? How would anyone know if I just made up my own wins/losses? I just want to make sure that its legit enough that when I file in 2014 that the IRS will accept my logs and we can be square. I obviously don't want anything to back fire on me as I do belive I play enough poker that I don't want to end up being audited or have someone come after me for tax evision.
Any input would help and is appreicated. TIA!
http://portableapps.com/apps/office/rednotebook_portable
Then, develop a 'diary template' that you can use to track each of your gaming sessions. In addition to the required accounting information, I also record gaming conditions, notes, etc. This way, I am encouraged to use the program for more than just keeping track of wins/losses.
GH, do you play poker or just use the red notebook for other gaming expense? I only ask because I don't do any other gambling other than poker. So I recommend poker journal for the poker player. Otherwise I would probably use another notebook type app for logging my activity. Thanks for your input!
Also, does anyone else know if I can ask the casino for a CTR or are they only necessary when the casino issues them?
I use Red Notebook, because it lets be keep track of everything I can imagine. All I do is create templates for:
* BJ sessions.
* VP sessions.
* No play 'exploratory' expeditions to casinos.
* General 'junk' you'd find in any AP notebook/diary.
Technically, You could deduct the $15 as a tax preparation expense ;)
CTR are filed by casinos with the IRS. If you check to website of most casinos, they have online win/loss statement requests. These are useful to ensure that your log is consistent with anything they reported via CTR. And remember, CTR are only required for certain dollar transaction levels.
I play some vp, and my log only includes date, place, any w2g's received, and amount won or lost at the casino regardless if or how many tax slips I've collected. I do not, however, in any year ever claim I've won more than I've lost, even though there have been some years that I've actually won. I've been audited once and they accepted my doctored up log. Easy peasy.
I've been told on numerous occasions that W2G's for table games are issues on wins of 300-1 or more AND the win pays more than $5000.
I regularly cash more than $5k in chips and have never been asked who the hell I am, LOL. Just because I cash chips at the cashier, doesn't mean I won anything.
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The Tax Court held in a memorandum decision released Monday that taxpayers who were casual gamblers recognized wins or losses when they redeemed their tokens and that they could not net their wins and losses across the year (Shollenberger, TC Memo 2009-306).
In this decision, the court accepted the IRS’ methodology for determining wagering gains and losses, which the Office of Chief Counsel put forth in a legal memorandum in 2008 (AM 2008-011).
The taxpayers in the case were a married couple who gambled occasionally at a casino in the small town of Charles Town, W.Va. On March 29, 2005, the husband hit a $2,000 jackpot at a dollar slot machine. The couple continued gambling and lost $400 from the jackpot; they left the casino that day with $1,600 in winnings. They did not report any gambling income on their tax return for 2005, and the IRS issued a deficiency notice for $2,000 in unreported gambling winnings.
Irs And Gambling Sessions
IRC § 165(d) states that “losses from wagering transactions shall be allowed only to the extent of the gains from such transactions” but does not provide a technical definition of the terms “gains” and “losses.” As AM 2008-011 explains, the term “transactions” in section 165(d) could mean every single play in a game of chance or every wager made. That interpretation would require a taxpayer to calculate the gain or loss on every transaction separately and treat every play or wager as a taxable event and also to trace and recompute the basis through all transactions to calculate the result of each play or wager.
Because that method would be “unduly burdensome,” the IRS legal memo allows a casual gambler to recognize a wagering gain or loss at the time he or she redeems tokens.
Irs Gambling Session Rules
At trial, the IRS conceded that under that method, the taxpayers should have reported $1,100 in gambling winnings rather than the $2,000 in the deficiency notice. According to the court, the lesser amount would be calculated as follows: $2,000 in jackpot winnings minus $500 in wagering money originally brought into the casino by the taxpayers minus the $400 lost by the taxpayers after the jackpot that day.
Irs Gambling Sessions
The taxpayers argued that they should be allowed to offset their gambling winnings with $2,264 of other gambling losses that they claimed to have incurred in 2005. Because section 165(d) uses the term “transactions,” the court held that the taxpayers could not net their gains and losses throughout the year. Instead, the court accepted the IRS’ treatment of transactions as occurring when the gambler cashes in his or her tokens at the end of play and held the taxpayers to have $1,100 of unreported gross income for the year.
Irs Gambling Sessions
According to the court, to allow the taxpayers to net gains and losses throughout the year would defeat the purpose of IRC § 63, under which losses of casual gamblers are allowable only as itemized deductions.
For more on IRS legal memorandum AM 2008-011, see Beavers, “IRS Issues Guidance on Determining Wagering Gains and Losses,” 40 The Tax Adviser 129 (February 2009).