A player can list his occupation on form 1040 as a professional gambler. This allows you to report losses as a direct reduction of income. (If you do not do this, you can take losses as a deduction if you itemize. Note: that your reported gambling losses cannot exceed your winnings if you itemize.) One important difference is that by directly reducing the net income, you are not liable for extra state income tax if you live in a state with a state income tax. (45 states out of 50 - Not it Nevada??). This is not true is Mississippi as they take a 3% gambling tax off the top of W2G wins. In any case it is critical to keep completely accurate records as people who list "professional gambler" as their occupation on a 1040 are about the most likely group to get audited.
···
----- Original Message -----
From: catcat94114
To: vpFREE@yahoogroups.com
Sent: 8/31/2003 5:24:23 PM
Subject: [vpFREE] Taxes and EV
This subject has never been addressed to my satisfaction.
I'll make 3 assumptions:
1)The filer is honest.
2)Being an advantage player, net win exceeds loss by a significant
amount.
3)Filer plays $ VP.
It seems that it would be rare indeed to have a positve EV game even
with CB considerations. Using a 36% combined fed and state tax, I
come up with 98.8% for JOB by subtracting 36% from the contribution of
the RF (2%) to the return. For DB it comes out to 99.57%.
How does the $ player make a profit? This is what keeps me from going
up from quarters or from playing a prog. when the RF is over $1200.
I'd appreciate some input on this.
George in SF
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