"A.G. Kalman" <agkdisposable-mtm[at]yahoo.com> wrote:

- quote -

Sorry, it's been years since I bumped into it, and I have no
idea where it was. I just remember thinking it was about
the silliest thing I'd ever seen. The last time I looked at
any regs having to do with gambling it was related to
withholding, but I doubt this issue is addressed there.

--
Phil Marti
Clarksburg, MD

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- quote -

The way you're asking the questions, each a variant, makes
me think you're bucking for a place on the Supreme Court,
which incidentally reconvenes next Monday. anyway.

- quote -

If the prize is worth 10$, it's still a winning, reportable
IN FULL on line 21 of 1040. Nothing to do with any possible
deduction on schedule a as I and others have borne out.

- quote -

Nope. It's 100,000$ that goes on line 21, and the 10$ over
on schedule a.

ChEAr$,
Harlan Lunsford, EA n LA

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- quote -

Oops, that should have said $20 for the book's value.

- quote -

Seth

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way111[at]gmail.com wrote:

- quote -

If there is a GAIN, it is a capital gain, but may be
eligible for Sec 121 treatment. A LOSS (selling price less
than cost basis) would not be deductible.

A bigger problem is that state law generally prohibits
private individuals from conducting lotteries.

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- quote -

Instead of betting on a game, I buy a $10 raffle ticket. I
win fourth prize, $20. Still a $10 winning?

Actually, fourth prize is a book worth $10. Still a $10
winning?

I got lucky and won first prize, a house worth $100,000.
Doesn't that mean it's a $99,990 winning?

Seth

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What are the tax implications if a person (rather than a
charity) raffles off their house?

For example, Joe Homeowner sells 1500 tickets at $100 per
ticket to raffle off his house.

Would the $150,000 he makes from selling tickets be
considered income from the "sale" of his house? IOW, does he
have a capital gain as opposed to regular income?

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"Stuart A. Bronstein" <spamtrap[at]lexregia.com> wrote:
- quote -

It is not can, but he must. The only problem is that the
expenses and losses are not deductible if the activity is
not legal where it it takes place. Do they still have the
Tax stamps?

--
Frederick E. Jorden
http://Tax-Accounting-Payroll.com
7825 Midlothian Tpk - 207
Richmond, VA 23235-5247
EMAIL knowtax[at]verizon.net
(804) 320-6210 FAX (804) 320-6211

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Phil Marti wrote:

- quote -

Please tell me which Reg. you reference as requiring you keep
track of every pull of the slot machine.

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- quote -

Right.

- quote -

Casino's don't work that way. If you bet $10 then either
you pay them $10 or they debit your account $10. If you
win, they pay you $20 or credit your account $20. Either
way, you have $10 in gambling income.

- quote -

See # 2 above. You have $10 in winnings. You have not
sustained any loss.

However, what if you placed two $10 bets on two different
games and won $10 on one bet and lost $10 on the other bet.
You would have $10 in gambling income and a $10 deduction if
you itemize.

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Stuart A. Bronstein wrote:
- quote -

If by Professional Gambler you mean someone who earns
his/her living by gambling, then that person is
self-employed and the Schedule C is the proper place for
income and expenses.

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- quote -

Right

- quote -

Right. And they did not charge the credit card first anyway.
- quote -

Still 10$ in winnings. You did not bet 10$; it was merely a
deposit and would have been a loss otherwise.

ChEAr$,
Harlan

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"Stuart A. Bronstein" <spamtrap[at]lexregia.com> wrote:

- quote -

I would think so. I'm not aware of anything excluding
gambling from a "trade or business."

On the purely anecdotal front, I dealt with one such
taxpayer in my IRS collection days. Unfortunately, it's
more than 30 years ago, so I don't remember whether the
returns had been audited or not.

--
Phil Marti
Clarksburg, MD

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"Phil Marti" <prm20871[at]verizon.net> wrote:
- quote -

Can a professional gambler do a Schedule C?

Stu

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- quote -

Let's consider three cases.

1. I bet $10 with a friend of mine on a ball game. I win, he
hands me $10. That's $10 in gambling income, period,
right?

2. I bet $10 with a casino on a ball game. They know me, and
they have my credit card on file, so I just tell them I'm
placing the bet. I win, they hand me $10. That's still
$10 in gambling income, right?

3. I bet $10 with a casino on a ball game. They don't know
me, so I have to put up $10 cash in case I lose. I win,
they hand me my $10 back and my $10 winnings, as a single
$20 bill. Is that now $20 in gambling winnings with $10
in offsetting losses?

Seth

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Stuart A. Bronstein wrote:
- quote -

This for Seth, too. He is taxed on the FMV of the house.
that's the one entry on line 21 of form 1040. Then, and only
then, if he has enough deductions to itemize them on
schedule a, can he deduct the 150$. It's not a "netable"
(?) transaction.

ChEAr$,
Harlan

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cpabakem01[at]yahoo.com wrote:

- quote -

Is it ever appropriate for a professional gambler to report
on a Schedule C?

Stu

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"Seth Breidbart" <sethb[at]panix.com> wrote:

- quote -

Yes, the Regs expect you to keep a record of the result of
every hand or every pull of a slot machine. I suspect that
any Tax Court judge who has ever played poker would accept
records and return entries based on sessions, but I don't
know if there's any case law on this or not.

--
Phil Marti
Clarksburg, MD

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"Stuart A. Bronstein" <spamtrap[at]lexregia.com> wrote:

- quote -

This is incorrect. All winnings are included on line 21.
Losses, up to the amount of winnings, are a Schedule A
deduction.

--
Phil Marti
Clarksburg, MD

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Herb Smith" <smithff33[at]aol.com> wrote:

- quote -

No, I'm suggesting, as I said the first time, that you can
net the cost of THE winning bet on line 21.

--
Phil Marti
Clarksburg, MD

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- quote -

Suppose, instead of a house worth (say) $100,000, he got a
box of cash worth $100,000. I think you'd agree that his
_gain_ was $99,850.

His basis is his cost ($150) plus the taxable gain on the
transaction ($99,850).

- quote -

No, he's taxed on the gain, FMV-$150.

Seth

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