TAX ON ROYAL FLUSH , ?

[marksalot300]

Michigan does this, too. I met a guy sitting next to me at a VP bank at MGM
Detroit, who told me that he'd lost 20K in 2005 but still owed state taxes.
If that isn't bad enough, Michigan also offers a property tax rebate of sorts
in the form of an income tax credit indexed to your income, and he lost a lot
of that due to the W2G effect as well.

This is why I will usually only play quarters around here, and will pick
low-variance dollars due to a lower likelihood of a W2G hit. No dollar DDB for
me.

- Brian in MI

In a message dated 2/18/2007 10:19:42 PM Eastern Standard Time,
b.glazer@att.net writes:

The tax situation in many states is even worse than you describe -- I know
for certain that in Indiana and Illinois, state income tax is on gross
winnings, with no offset for losses. So if you report $40,000 in winnings (either
because you have that in W2Gs, or because you are honestly reporting all your
winning sessions) and $50,000 in losses on your federal return, you would owe
no federal tax, but would pay state gross income tax on $40,000.

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

[Preston]

Good point Brian, I had a tax client last year who had over $30,000 in w-2 G's and paid Michigan tax on them and also suffered the hit on the homestead credit. What was his total win? Try over a $35,000 loss per the win loss statements which isn't deductible on the state tax return. Of course our good state is in the financial toilet so don't expect any breaks soon.

Brian wrote.................>Date: Mon, 19 Feb 2007 07:59:12 EST

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Michigan does this, too. I met a guy sitting next to me at a VP bank at MGM
Detroit, who told me that he'd lost 20K in 2005 but still owed state taxes.