A Win/Loss Tax Question

[opzop2wah]

Thanks for all the great info.
My turn for a question:
I live in Illinois and 2003 was the first year I got W2-G's. When I had my
taxes done, my accountant said in Illinois that all your coin in (any time you
get a credit on the machine as well as what $ you actually put in) counts as
income to be added to your AGI, making your AGI HUGE (and erroneous), and
that would be actually what I had to pay state and federal taxes on. She said
it was better to take the hit on the W2G's and pay federally and locally.
In 2004 I collected more W2-G's, and was hoping you could verify what my
accountant said and give me any suggestions that would work in Illinois.
Thanks!
Dori in Illinois

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[Jean_Scott1]

<<I live in Illinois and 2003 was the first year I got W2-G's. When I had my
taxes done, my accountant said in Illinois that all your coin in (any time you
get a credit on the machine as well as what $ you actually put in) counts as
income to be added to your AGI, making your AGI HUGE (and erroneous), and
that would be actually what I had to pay state and federal taxes on. She said
it was better to take the hit on the W2G's and pay federally and locally.
In 2004 I collected more W2-G's, and was hoping you could verify what my
accountant said and give me any suggestions that would work in Illinois.>>

First and foremost, get another accountant. The IRS isn't clear on what a "session" is - but everyone agrees that it doesn't mean one hand. That would make record-keeping impossible. There has been talk about this "coin-in" factor - and, heavens help us, it might someday get put in writing - but I don't know of any tax preparer that gives advice like this at the present time. Her advice on using the W2G figure is not correct either - even though a lot of tax preparers, mostly out of ignorance of gambling issues, do give that advice. It's back to "session wins" and "session losses."

This is why I am glad I have Marissa as my tax preparer - she is a gambler herself and knows the issues.

I am sorry to tell you however you do it, you are going to get screwed by Illinois since they don't allow any deduction for gross losses. So you are going to have to pay state taxes on gross wins, however you figure what that figure is. Same in IN - that is one reason why we moved from IN to Las Vegas!!!!!

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[jim_becker]

Thanks for all the great info.
My turn for a question:
I live in Illinois and 2003 was the first year I got W2-G's. When I

had my

taxes done, my accountant said in Illinois that all your coin in

(any time you

get a credit on the machine as well as what $ you actually put in)

counts as

income to be added to your AGI, making your AGI HUGE (and

erroneous), and

that would be actually what I had to pay state and federal taxes on.

She said

it was better to take the hit on the W2G's and pay federally and

locally.

In 2004 I collected more W2-G's, and was hoping you could verify

what my

accountant said and give me any suggestions that would work in

Illinois.

Thanks!
Dori in Illinois

If I read that correctly, your accountant said 'every credit on the
machine, including the $100 bill inserted, is income against your AGI'
Well certainly they money you insert is not 'income', but technically
if you play a hand for $5 and win back your $5 that would be a return,
but not a win, although if you win back more than $5 I guess those
would be a 'win', that sure would be a nearly impossible task of
tracking your win's and lose's. I dont play in IL because they do not
allow and deduction for your lose's (as I have read several times in
this msg base), so EVERY w2g is a Win with no offset available at the
state level, that is just wrong.

Hopefully some others can shed additional light on the subject.
Jim

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[eecounter]

I live in Illinois and 2003 was the first year I got W2-G's. When I

had my taxes done, my accountant said in Illinois that all your coin
in (any time you get a credit on the machine as well as what $ you
actually put in) counts as income to be added to your AGI, making
your AGI HUGE (and erroneous), and that would be actually what I had
to pay state and federal taxes on. She said it was better to take
the hit on the W2G's and pay federally and locally.

In 2004 I collected more W2-G's, and was hoping you could verify

what my accountant said and give me any suggestions that would work
in Illinois.

Thanks!
Dori in Illinois>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>

Let's just say that your accountant is mis-informed. As Jean Scott
said, whatever a "session" may be, it most certainly isn't on a per
hand basis. Can you imagine a blackjack player recording the results
of each hand in a notebook? He would get tossed for counting,
whether he was a counter or not. It is generally to your advantage
to make your "sessions" consist of as long a time as you think you
can reasonably justify. You won't be able to justify a year long
session, but you could probably justify a day long session.

HOWEVER, I have heard at least one horror story of state tax revenue
people that have come up with the same interpretation as your
accountant. Some unfortunate person will attach a win / loss
statement from a casino(s) to their tax return as supporting evidence
for Schedule A deductions, and their state tax people will get hold
of a copy of the statement and say "wait a minute - this says you had
$2,010,000 coin in and $2,000,000 coin out. That must mean that you
had 2 million dollars in casino winnings. And since you can't take
Schedule A deductions in this state, that means you owe state taxes
on all 2 million dollars. Pay up!" For this reason alone I stay as
far away from those casino win / loss statements as possible. I
would never request one, and I don't want the casinos to send them to
me unrequested either.

EE

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--- In vpFREE@yahoogroups.com, Opzop2wah@a... wrote: