A.G. Kalman wrote:

- quote -

I wasn't suggesting that wins and losses can be offset
(because, in my opinion, they cannot). I was simply
proposing a simplified record keeping scheme where one of
the items is determined arithmetically. If you don't like
this approach, then don't use it. <g
As an analogous situation, I would note that it is probably
acceptable to determine your BUSINESS mileage by
meticulously tracking you PERSONAL mileage and subtracting
that from your TOTAL mileage (although I don't recommend
this particular method). Once again, this is an "arithmetic"
approach to measuring a deduction. Naturally, in the case of
either gambling or auto use, your records must be "credible"
and all other substantiation requirements must be met.

If you choose not to maintain adequate records, then don't
be surprised if the Tax Court disallows any deduction for
gambling losses.

- quote -

I must confess that I am not familiar enough with the game
of craps to comment on the specifics. But, I stand by my
assertion that when the outcome of a particular wager is
determined and you are free to take you chips and leave, you
have a "closed transaction" for tax purposes. I am not aware
of any provision under the IRC that would alter this result
simply because the transaction is convoluted.

- quote -

Permit me to ask: What would you do (and how much would you
report) if that $4,000 of estimated winnings consisted of a
large win of $1,500 that was reported on Form W-2G, plus
$2,500 of smaller "non-reported" wins? Would you still
report "zip" on the theory that you had no "session" gain or
loss? Or, would you limit your 1040 income and loss to
$1,500 notwithstanding the fact that you reasonably know
those numbers are not "true, correct and COMPLETE?" Or what?
<g
Memo to everyone: Please remember that I am discussing
concepts that are relevant to NON-professional gamblers
only. Different rules MIGHT apply to "pros."

MTW

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TW wrote:
- quote -

You have confused me. You have stated that a "session" is
not relevant. It is the wager that is relevant. I don't
know what you mean when you say in point 3 "when you
finish."

Each throw of the dice at a crap table could be construed to
be a wager as each throw can generate some winnings and/or
some losses. E.g., a bettor who makes Pass bets and Come
bets can have multiple numbers in play. On any throw the
bettor can be changing the amount at risk. Any throw could
generate a win on a covered number, a win on the pass line,
a win on the come bet, a loss on the pass line and coverd
numbers, a loss on the come bet, or a neutral return
(non-event).

Are you saying that I now have to record the result of each
dice throw that does not produce a neutral result as either
an addition to gross income or an addition to an itemized
deduction as each throw is a different wager? If not, then
you must be considering multiple throws to be a session!

A player who starts with $500 in chips and plays for a few
hours and leaves with $500 might have gross income of $4000
and itemizes losses (that may be unusable) of $4000 by
keeping track of each "wager."

I say "no way." If I start with $500 at the table and I
have $500 when I leave the table, I'm going to report zip!
If you don't like the concept of this being a session, then
consider the time spent at the table as a $500 wager in
which a series of small events over an undefined period of
time determine the result!

--
Alan
http://taxtopics.net

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A.G. Kalman wrote:

- quote -

I'm not sure that would be required. I believe you could do as
follows:

1) Record the amount of cash you start with.
2) Record the GROSS amount of each win.
3) Record the amount of cash left (if any) when you finish.
4) If applicable, note any other changes in your cash balance
(more money obtained from the ATM, some money spent on
drinks, etc.).

Armed with these numbers, you can accurately determine your
wins and losses (the latter being determined
arithmetically). Note that I am simply addressing the
numerical aspects; the regs probably also require you to
note other information such as date, location, etc.

- quote -

Can you cite anything authoritative that permits
non-professional gamblers to state less than the full GROSS
amount of their winnings? (Other than reducing the gross
amount by the SPECIFIC wager in question, when appropriate.)

Can you cite anything authoritative that would excuse a
licensed CPA from estimating the gross amount of the
winnings in the absence of complete and credible records?

MTW

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MTW wrote:
- quote -

[snip]

- quote -

I better start keeping track of each throw of the dice at
the crap table!

I don't believe the IRC section and its regulations on
record keeping require I keep such a record to accurately
reflect my income and deductions.

--
Alan
http://taxtopics.net

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MTW wrote:

- quote -

(snipped a bunch here)

each transaction? I remember when I took another
contributor of this board to a casino in Biloxi. I'm not a
gambler, but I did commit myself to playing five nickels.

Now Mike, you're advocating that I should have recorded each
time I yanked the handle on each nickel? Wow, it's a good
thing I didn't hit the jackpot. What if I'd won 10$? to
deduct my 25 cents on schedule a, I would have needed a
record of all six plays.

Right; Go ahead now and ask me, why wouldn't it have been
205 plays?

I wonder is she kept such a record.

ChEAr$,
Harlan Lunsford

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A.G. Kalman wrote:

- quote -

As the author notes, "Now, what exactly is a session?
Unfortunately, there have been no court cases or IRS Revenue
Rulings on point."

Indeed, after reading this and other similar articles, I
have yet to be convinced that the concept of "session" is
even relevant. A far more relevant concept, in my opinion,
is "wager."

Once the terms of the wager are satisfied, it is my opinion
that you have a "closed transaction." And, at that point the
tax consequences are triggered. Consider, for example, that
a "day trader" CANNOT lump together all of his trading
activity during a particular "session" (ie: "day"). Rather,
EACH closed transaction must be reported on its own. I can't
think of a single reason why this approach doesn't apply in
the case of gambling. (Different rules ~might~ apply to
PROFESSIONAL gamblers and PROFESSIONAL day trader/dealers.)

So, if the wager is on a hand-by-hand (or pull-the-crank, or
spin-the-wheel, etc.) basis, you must note your winnings or
loss on each hand (just as you must do so with each stock
trade). If, however, you have entered a "tournament" where
the outcome of the wager can't be determined until a course
of play has been completed, then with respect to THAT
PARTICULAR wager, you would have a "session."

The mere fact that this makes record keeping tedious does
not ~excuse~ you from compliance with the law. The law is
the law. (And everyone knows that I'm a "law-n-order" kind
of a guy! "Love it, or leave it," as they used to say! <g> )

As to professional ethics (related to CPAs, at least), I
believe that it would be necessary (in the absence of
complete or credible records) to ESTIMATE the total of your
GROSS wins, separate from your losses. Doing so has obvious
tax ramifications because the resulting increase in AGI
alters many other computations on the return, even though
your NET gambling income might be "zero." (And, indeed,
there are court cases holding that returns reporting ONLY
those wins that are reported on 1099s are NOT credible.)

If you don't like this result, then by all means complain to
your Congresspersons. But, I wouldn't expect too much
sympathy because I continue to believe that this
"unfairness" is DELIBERATE, so as to not appear that the tax
code in any ways favors or endorses gambling. (If particular
state choose to exempt their own lottery winnings, that
apparently is their ~sovereign right~.)

MTW

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Rich Carreiro wrote:

- quote -

Technically, there is no provision to net anything per a
strict reading of the IRC. However, for practicality,
netting within the same day seems to have been done in the
past. There may be a revenue ruling or court case that
addresses this. Otherwise, the recordkeeping - of tallying
each win and each loss separately, appears overburdening.

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Rich Carreiro <rlcarr[at]animato.arlington.ma.us> wrote:

- quote -

I would advise recording the blackjack session (several
hours of continuous play) net gain of $20 in your diary and
report it on your tax return. For a good analysis on "
sessions", see
http://www.gambling-law-us.com/Artic...ng-Session.htm.

DLB

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Rich Carreiro wrote:

- quote -

Russell Fox, E.A. has an article on this subject
(what is a gambling session) that may shed some light.
http://www.gambling-law-us.com/Artic...ng-Session.htm

--
Alan
http://taxtopics.net

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Rich Carreiro wrote:

- quote -

It is my understanding that if you are free to get up and
leave the table with your winnings after each hand, then you
account for the transactions on a hand-by-hand basis. This
can cause some interesting problems on your tax return if a
significant increase in AGI results.

MTW

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How does the IRC mandate to separately report gambling wins
(as above the line gross income) and gambling losses (as
below the line itemized deductions) work in the case of a
casino table game (like blackjack, etc.) where you are
making a whole succession of separate bets?

Are you allowed to net out (but to no less than zero)? If
so, over what period? The time you're at a particular
table? A day? Some number of hours? Can you combine a net
loss at one game with a win at another? Or are you
technically supposed to track hand-by-hand results?

I just want to know how to technically, properly report my
massive $20 profit after several hours of $5/hand blackjack
:-)

--
Rich Carreiro rlcarr[at]animato.arlington.ma.us

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