vpFREE2 Forums

Proposition 3 on the Nevada Ballot affects Video Poker Players Big Time

#1

The following was posted by attorney Bob Nersesian on the BJ21 forum concerning Proposition 3 on the Nevada ballot:

"This
just popped up in my office from another attorney as an issue. For
those of you who file Schedule C income on your gaming activities, it
appears that the Prop. 3 gross receipts tax will apply to all payouts
received in the tax year in excess of one-million dollars. While I am
not opining on the methodology of collection, the availability of
discovery by the Nevada taxing authority, or the practicalities of
implementation, clearly this puts effectively all professional gamblers
at risk. Simply, if you churn three million to win $150,000.00, it
appears that there would be a tax owed to Nevada in an amount of over
$60,000.00. It appears to also apply to non-Nevada Schedule C filers
whose activities occur in Nevada. It also applies to a bad year where
two million churned results in a loss of $10,000.00, and a tax of just
shy of $40,000.00 to be paid on top of the loss."

I asked my accountant what it would cost me if I had $5 million in W2Gs in a year. She responded that IF this proposition passes and IF it applies to Schedule C, the tax on $5,000,000 in W2Gs would be $100,000 --- whether I won or lost that year.

If this passes and is enforced, that's the end of my video poker career in Nevada. Playing quarter full pay deuces wild would avoid this problem, but that's not an option that interests me.

Bob
                 
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#2

How to get rid of the pros in one easy step, no more need to bar or no mail, just tax them to death.

A.P.

···

________________________________
From: "Bob Dancer bobdancervp@hotmail.com [vpFREE]" <vpFREE@yahoogroups.com>
To: "vpfree@yahoogroups.com" <vpfree@yahoogroups.com>
Sent: Friday, October 31, 2014 4:01 PM
Subject: [vpFREE] Proposition 3 on the Nevada Ballot affects Video Poker Players Big Time
  
The following was posted by attorney Bob Nersesian on the BJ21 forum concerning Proposition 3 on the Nevada ballot:

"This
just popped up in my office from another attorney as an issue. For
those of you who file Schedule C income on your gaming activities, it
appears that the Prop. 3 gross receipts tax will apply to all payouts
received in the tax year in excess of one-million dollars. While I am
not opining on the methodology of collection, the availability of
discovery by the Nevada taxing authority, or the practicalities of
implementation, clearly this puts effectively all professional gamblers
at risk. Simply, if you churn three million to win $150,000.00, it
appears that there would be a tax owed to Nevada in an amount of over
$60,000.00. It appears to also apply to non-Nevada Schedule C filers
whose activities occur in Nevada. It also applies to a bad year where
two million churned results in a loss of $10,000.00, and a tax of just
shy of $40,000.00 to be paid on top of the loss."

I asked my accountant what it would cost me if I had $5 million in W2Gs in a year. She responded that IF this proposition passes and IF it applies to Schedule C, the tax on $5,000,000 in W2Gs would be $100,000 --- whether I won or lost that year.

If this passes and is enforced, that's the end of my video poker career in Nevada. Playing quarter full pay deuces wild would avoid this problem, but that's not an option that interests me.

Bob

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[Non-text portions of this message have been removed]

#3

AP wrote: How to get rid of the pros
in one easy step, no more need to bar or no mail, just tax them to death.

It’s always nice to get a warm, sensitive response from
Albert!

Kidding aside, this actually will be really bad news for
Nevada casinos and players of all levels. Of the players to get $1 million or more in W2Gs here, a
relatively small percentage of them are successful pros. Adding a $20,000 tax
per million dollars of W2Gs will cause many players to play elsewhere. Which
will be a BIG revenue loss for the casinos. They make LOTS of money off of players who get a lot of W2Gs.

If casinos are losing money, you can expect a trickle-down
effect to all games. The pay schedules here, even for quarters, will become
like they are in other states --- typically less than 98%. This proposition
does not only affect big players. It does not only affect pros. If affects all of us.

Apparently I mislabeled this. It's Proposition 3A --- not Proposition 3.

Bob
                  
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#4

You got me wrong on that one. I was being my usual sarcastic self, but my ire was aimed at the casinos or whoever it is that is encouraging this action. I'd be guessing that it is the casino bean counters that are promoting this, as their usual reaction to poor business is always to pull back instead of promote more play.

A.P.

···

________________________________
From: "Bob Dancer bobdancervp@hotmail.com [vpFREE]" <vpFREE@yahoogroups.com>
To: "vpfree@yahoogroups.com" <vpfree@yahoogroups.com>
Sent: Friday, October 31, 2014 5:33 PM
Subject: RE: [vpFREE] Proposition 3 on the Nevada Ballot affects Video Poker Players Big Time
  
AP wrote: How to get rid of the pros
in one easy step, no more need to bar or no mail, just tax them to death.

It’s always nice to get a warm, sensitive response from
Albert!

Kidding aside, this actually will be really bad news for
Nevada casinos and players of all levels. Of the players to get $1 million or more in W2Gs here, a
relatively small percentage of them are successful pros. Adding a $20,000 tax
per million dollars of W2Gs will cause many players to play elsewhere. Which
will be a BIG revenue loss for the casinos. They make LOTS of money off of players who get a lot of W2Gs.

If casinos are losing money, you can expect a trickle-down
effect to all games. The pay schedules here, even for quarters, will become
like they are in other states --- typically less than 98%. This proposition
does not only affect big players. It does not only affect pros. If affects all of us.

Apparently I mislabeled this. It's Proposition 3A --- not Proposition 3.

Bob
                            
[Non-text portions of this message have been removed]

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vpFREE Links: http://www.west-point.org/users/usma1955/20228/V/Links.htm

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#5

If this is determined to apply to professional gamblers, it will really be
prohibitive. However, I believe your accountant got a detail wrong.. you'd
be taxed 2% on 70% of revenue, so the tax would be $70k instead of $100k.
Obviously, still brutal.

Ed

···

On Fri, Oct 31, 2014 at 1:01 PM, Bob Dancer bobdancervp@hotmail.com [vpFREE] <vpFREE@yahoogroups.com> wrote:

The following was posted by attorney Bob Nersesian on the BJ21 forum
concerning Proposition 3 on the Nevada ballot:

"This
just popped up in my office from another attorney as an issue. For
those of you who file Schedule C income on your gaming activities, it
appears that the Prop. 3 gross receipts tax will apply to all payouts
received in the tax year in excess of one-million dollars. While I am
not opining on the methodology of collection, the availability of
discovery by the Nevada taxing authority, or the practicalities of
implementation, clearly this puts effectively all professional gamblers
at risk. Simply, if you churn three million to win $150,000.00, it
appears that there would be a tax owed to Nevada in an amount of over
$60,000.00. It appears to also apply to non-Nevada Schedule C filers
whose activities occur in Nevada. It also applies to a bad year where
two million churned results in a loss of $10,000.00, and a tax of just
shy of $40,000.00 to be paid on top of the loss."

I asked my accountant what it would cost me if I had $5 million in W2Gs in
a year. She responded that IF this proposition passes and IF it applies to
Schedule C, the tax on $5,000,000 in W2Gs would be $100,000 --- whether I
won or lost that year.

If this passes and is enforced, that's the end of my video poker career in
Nevada. Playing quarter full pay deuces wild would avoid this problem, but
that's not an option that interests me.

Bob

[Non-text portions of this message have been removed]

[Non-text portions of this message have been removed]

#6

It doesn't seem like that big a deal. Just do what most gamblers do and report your gambling winnings on Form 1040 and report gambling losses as itemized deductions. Perhaps not as economical as using Schedule C, but probably not a big difference unless you have a lot of related expenses like unreimbursed travel.

[Non-text portions of this message have been removed]

···

Sent from my iPad

#7

I'm not sure where Nersessian's friend got the idea that gross W-2Gs would
be taxed under this law. I am not a tax accountant but I read the law and it
seems to be a tax on gross income, which would be net gambling winnings
before expenses. You even get to deduct up to $300k of compensation before
the tax kicks in. There isn't even a place on Schedule C to enter the W-2G
total.

Opinions of tax accountants would be welcome.

Cogno

···

-----Original Message-----
From: vpFREE@yahoogroups.com [mailto:vpF…@…com]
Sent: Saturday, November 1, 2014 4:28 AM
To: vpFREE@yahoogroups.com
Subject: Re: [vpFREE] Proposition 3 on the Nevada Ballot affects Video Poker
Players Big Time

It doesn't seem like that big a deal. Just do what most gamblers do and
report your gambling winnings on Form 1040 and report gambling losses as
itemized deductions. Perhaps not as economical as using Schedule C, but
probably not a big difference unless you have a lot of related expenses like
unreimbursed travel.

Sent from my iPad

[Non-text portions of this message have been removed]

------------------------------------
Posted by: Vegasvpplayer <vegasvpplayer@gmail.com>
------------------------------------

vpFREE Links: http://www.west-point.org/users/usma1955/20228/V/Links.htm

------------------------------------

Yahoo Groups Links

#8

Cogno wrote: "There isn't even a place on Schedule C to enter the W-2G total."

You're claiming less gross income than your W2G and 1099misc totals? Doesn't that initiate an audit?

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#9

I have not worked as a tax accountant in 15 years and never did gamblers returns. If you read that law again. i think the key will be the COGS section and how people are reporting and filing. From previous discussions I have the impression that out of 10 people there are 8 different was people are filing. Some people are reporting w2 only it sounds like and others are showing the full activity.

So if you are $5M coin in, get $1M in W2's and win $5.1.M, I would think the tax is on 100K not the $1M.

Your gross $5.1M - COGS $5M leaves your profit to be taxed. The law allows you to deduct compensation or COGS.

I have no idea wht you guys are doing but new tax laws usually involve people tweaking their returns, legally or not,

Rich
AC Cheapie

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#10

Vegasvpplayer wrote: "It doesn't seem like that big a deal. Just do what most gamblers do and report your gambling winnings on Form 1040 and report gambling losses as itemized deductions."

As you may find out, that is a big deal for many people, especially those in retiring ages. Reporting W2G and 1099misc on the 1040 inflates your AGI, and that triggers all sorts of bad things. Gambling losses are not deductible from your AGI, they are deducted downstream.

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#11

Right on, Cogno. "Gross Receipts" are reported on Line 1 of Sch C. Not sure how one can avoid reporting, at minimum, gross reported w-2g winnings here (but there are more creative accountants than myself).

---In vpFREE@yahoogroups.com, <nightoftheiguana2000@...> wrote :

Cogno wrote: "There isn't even a place on Schedule C to enter the W-2G total."

You're claiming less gross income than your W2G and 1099misc totals? Doesn't that initiate an audit?

[Non-text portions of this message have been removed]

[Non-text portions of this message have been removed]

#12

I see your point. Would the "bad things" be enough to wipe out a 6 figure expected annual income?

···

Sent from my iPhone

On Nov 1, 2014, at 12:14 PM, nightoftheiguana2000@yahoo.com [vpFREE] <vpFREE@yahoogroups.com> wrote:

As you may find out, that is a big deal for many people, especially those in retiring ages. Reporting W2G and 1099misc on the 1040 inflates your AGI, and that triggers all sorts of bad things. Gambling losses are not deductible from your AGI, they are deducted downstream.

[Non-text portions of this message have been removed]

#13

Vegasvpplayer wrote: "I see your point. Would the "bad things" be enough to wipe out a 6 figure expected annual income?"

I doubt that filing W2G's on the 1040 would "wipe out" a 6 figure non-gambling income, but it might shave 10 or 20% or more, as long as you're fine with that. Are you familiar with the AMT yet? Really, if you're gambling enough to generate W2G's or lucky enough to get hit with a 1099misc for a drawing you need a tax accountant who specializes in gambling reporting and you need to have these conversations with that accountant. The book "Tax Help for Gamblers" by Jean Scott's accountant would be a good start.

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