Someone wrote: <<Has anyone tried to deduct online gambling losses, against their land based
wins or other wins for that matter, on their taxes? I had a great year on
land but didn't do as well online. If I deduct online losses from my total wins
I don't get hurt too bad, but if I don't use those deductions I will be stuck
with a big tax bill. I have receipts/records to back everything up but with
the ? legality of online gaming I wonder about potential consequences.>>
Someone else replied: <<I'm no expert, but it would seem to me that you'd be admitting to
participation in a technically illegal activity.>>
All income is taxable, legal or illegal, according to IRS regulations.
Many many people who earn income at illegal activities (i.e., prostitution, bookmaking, etc.) report that income - or at least part of it. Supposedly the IRS end of the government is not supposed to share records with other government entities.
In fact, many criminals (i.e., Al Capone) have been arrested and sentenced on tax evasion, which is easier to prove than the actual crimes.
Therefore, many players DO report wins/losses from online gaming, keeping a diary just like they do for gambling in bricks-and-mortar casinos. However, I am sure that many "forget" a lot of their wins and "remember" all their losses when April 15 is coming around. Obviously this is a common practice in any activity where there is no paperwork sent to the IRS from the source of the income!!!!
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Jean $�ott - http://www.FrugalGambler.biz
Tax time is coming up - groan! "Tax Help
for the Frugal Gambler" can answer many
of your questions!