vpFREE2 Forums

Tax Time Again

#1

I live in CT and I have always assumed I have no way around the way the state does not let you deduct gambling losses against wins as reported on W2G's as the feds will if you itemize. But I was reading on the national VPFREE some references to tracking your 'sessions' and how this method was fair and it sounded like it might get around this unfairness. I would think that at the end of the year you would still be in the same boat, though. Am I wrong? Does anyone know anything about this?

Chauncey

#2

Tracking your sessions has to do with determining your gambling income and losses for federal purposes. According to the federal regulations wins are the sum of your winning sessions and losses are the sum of your loosing sessions. For example, if you have a winning session with no W2-G, you are supposed to report that as part of your winnings, however if you have a winning session which is less than the W2-G amount you are supposed to include the lower amount as the win. However, I found in practice that the IRS tracks W2-Gs and if you show wins less than the sums of those, you better footnote why.

CT regulations mentions W2-Gs and specifies that wins are taxable. [Note however, that CT does determine income in the same manner as the Feds.] The only may to escape CT taxation is to file federally as a professional gambler on a Schedule C. You need to meet fairly stringent record keeping and business practices to qualify (proving you actually behaved as a "trade or business" and not merely as a hobby or "activity engage in for profit").

Of course you could move out of state, but who would want to miss this January's weather?

David

···

--- In vpFREE_NewEngland@yahoogroups.com, "cbivitz99" <gamble@...> wrote:

I live in CT and I have always assumed I have no way around the way the state does not let you deduct gambling losses against wins as reported on W2G's as the feds will if you itemize. But I was reading on the national VPFREE some references to tracking your 'sessions' and how this method was fair and it sounded like it might get around this unfairness. I would think that at the end of the year you would still be in the same boat, though. Am I wrong? Does anyone know anything about this?

Chauncey

#3

Thanks David. As I suspected. It takes quite a bite out of the bottom line.

I can't move until I get my money's worth out of my newly minted snow blower. -Chauncey

···

--- In vpFREE_NewEngland@yahoogroups.com, "David" <d_richheimer@...> wrote:

--- In vpFREE_NewEngland@yahoogroups.com, "cbivitz99" <gamble@> wrote:
>
> I live in CT and I have always assumed I have no way around the way the state does not let you deduct gambling losses against wins as reported on W2G's as the feds will if you itemize. But I was reading on the national VPFREE some references to tracking your 'sessions' and how this method was fair and it sounded like it might get around this unfairness. I would think that at the end of the year you would still be in the same boat, though. Am I wrong? Does anyone know anything about this?
>
> Chauncey
>

Tracking your sessions has to do with determining your gambling income and losses for federal purposes. According to the federal regulations wins are the sum of your winning sessions and losses are the sum of your loosing sessions. For example, if you have a winning session with no W2-G, you are supposed to report that as part of your winnings, however if you have a winning session which is less than the W2-G amount you are supposed to include the lower amount as the win. However, I found in practice that the IRS tracks W2-Gs and if you show wins less than the sums of those, you better footnote why.

CT regulations mentions W2-Gs and specifies that wins are taxable. [Note however, that CT does determine income in the same manner as the Feds.] The only may to escape CT taxation is to file federally as a professional gambler on a Schedule C. You need to meet fairly stringent record keeping and business practices to qualify (proving you actually behaved as a "trade or business" and not merely as a hobby or "activity engage in for profit").

Of course you could move out of state, but who would want to miss this January's weather?

David

#4

I too have been working on my taxes, and the 5% CT income tax on gambling wins makes advantage play difficult in Connecticut. I try to play the best games that return over 99% with perfect play, but lopping off 5% from the win limits the return. Let's say you play a million through a 9/6 JoB machine during the year for a theoretical loss of $4600. Your total session wins might be $30,000 and your session losses might be $34,600. Your 5% CT income tax on the 30K win would be $1,500 which means you are playing a 99.54% JoB game at 4,600 + 1,500 / 1 Million or 99.39%. Not exactly up to professional standards.
Good thing the comp's (players points, free rooms, free player lounge privileges etc) aren't taxable. At a Mohegan Sun comp rate of .66%, I guess you can get a positive return of 100.05%, but just barely.