Question on Poker and Taxes

Ladeda · Feb 11, 2005

Watching Tilt last night got my thinking again about something I've been wondering for a long time. When you win a certain amount on a slot of VP machine you need to fill out the tax form on site if you win over a certain amount. Some states as little as $1200 from my experience.

How does this work with poker? Since many high states players buy in for $5000 chips and higher I would assume that they wouldn't need to fill the tax form everytime they cashin at the end of a session. I guess the same question would go for blackjack and other table games.
If there is a limit where they would have you "sign out" what would stop a player from just cashing in the chips in amounts smaller then that limit.

Thanks in advance.

BROMOx · Feb 11, 2005

I once cashed $25,500 in chips at the Monte Carlo (won from roulette of all things) without ever signing a thing. They asked for ID and that was that.

I have no answer for you.

Doug · Feb 11, 2005

Lad; Probably nothing, but something like WSOP is different !

WildBill · Feb 11, 2005

The law says whenever you receive 10,000 or more in cash you have to file a CTR, but this is just a recordkeeping function. I know in most poker tournaments any payout of just $600 requires a W2G which is much worse because this is a statement of income and you have to report it, subject to deductions for losses of course. Many times in the low limit tourneys at the Orleans deals are made to get everyone around this, with floorpeople throwing in paid entries to other tournaments as a way around a cash out of 600.

Ladeda · Feb 11, 2005

For example a 300/600 limit game where all the players have 5-10k in chips at the table. Wanted to know if they take 12k to the window would they have to fill anything out.
I've filled out a form for a $1200 VP royal before. On the other hand I cashed out over $1000 in chips the other day in the poker room and didn't even have to show ID.

BlackBart · Feb 11, 2005

Normally the IRS rules require taxes on a wager that pays greater than 300 to 1. At the track, that usually means a $600 ticket on a $2 bet will be a tax ticket. I don't think casino table winnings are taxable.

christof · Feb 11, 2005

Black Bart said:
I don't think casino table winnings are taxable.

Of course table winnings are taxable. I don't know the answer about withholding on the spot or filling out forms though.

Woody0 · Feb 11, 2005

I've always thought that the high stakes professional poker players keep boxes with several thousand dollars in chips in places like the Bellagio. I imagine that this is not income until it is converted to cash and would provide a cushion for minimizing the year to year swings in income.

BlackBart · Feb 11, 2005

christof said:
Of course table winnings are taxable. I don't know the answer about withholding on the spot or filling out forms though.

Clarification: table winnings are indeed taxable (as is all income), but I believe that they are not subject to immediate withholding.

:icon_conf

WildBill · Feb 11, 2005

Very little is subject to withholding. The forms are either a declaration of a gambling win (W2G) or just stating that you had a large cash transaction. Still the law clearly states declare all gambling wins and deduct any losses up to the amount you won. How you buy in or cash out of a game has no effect on your tax liability, but it could get rather tough to have a long list of CTRs in casinos and yet not report any winnings/losses on your taxes.

mj23 · Feb 11, 2005

BROMOx said:
I once cashed $25,500 in chips at the Monte Carlo (won from roulette of all things) without ever signing a thing. They asked for ID and that was that.

I have no answer for you.

If you get audited you will end up paying taxes on this figure less your buy in unless you can show them loses!

Pam · Feb 12, 2005

I have only declared my gambling winnings when I have signed W-2G's as the IRS knows you received that money. As I play the horses a lot and bet only Pic 3's.4's and 6's I sign a lot of W-2gs in a year. I just add them up and declare total of W-2g's on line 21 under other income (gambling winnings) listed on the 1040 form. On schedule A I deduct same amount on line 27 listed as other misc losses...never been a problem. Just do not go out and buy a 500K house or a 100K car..they might not believe you!

In addition the IRS likes to see a diary of your gambling wagers made each day and the results. I found this out when I called them after a large Pic 6 hit and asked them what is their criteria for proof of gambling losses...what fun that was..I kept getting transferred to person after person until someone that knew what I was talking about explained about keeping a ledger..I have ever since.

Also as far as casino games..NOT TAXABLE..just stay below 10K as thay might get to wondering what the hell you are doing if you have a bunch of 10K forms..used strickly for record purposes and not a declaration of winnings as someone else pointed out. The guy that won 25k at a table game mentioned earlier has no problems..he could have started with 100k and cashed out 25K for a 75K loss..only when you sign a W-2G form does the IRS have a document that states you cashed out this amount...you will get in trouble if you do not report the money. I know as I do taxes for a few of my gambling friends including a couple of LA bookies I have known for years..befor they used me a few of them forgot about reporting the W-2G's..also some just get lost. Always keep each 1 and put them in a file and REPORT them!

Hope this helps
Pam

peteep · Feb 12, 2005

Just come and play in Canada. Keep your money!

Pam · Feb 12, 2005

Peteep ..we do keep our money..gambling losses offset gambling winnings. Of course the IRS gets to keep 28% of it for a while if any W-2G exeeds 5K. I kind of like that though as I know money is there and I can not touch it until I get my refund..helps keep me in check

Pam

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