vpFREE2 Forums

Taxes - S corporation

#1

I'm no accountant, but from my research on taxes, I think your accountant
probably gave you some bad or at least incomplete advice. If you want to file
as a Professional Gambler, you don't need to have an S Corp. You can use
your own SS #. But you will have to qualify as a business under IRS rules.
This means having a profit in 3 out of 5 years, and being a full-time gambler.
Those people who have a "real" job and also gamble a lot, who have filed as
Professional gamblers (Schedule C), often have problems proving to the IRS
that they are engaging in a business and not a hobby. Also professional
gamblers have a difficult, if not impossible, deducting losses larger than wins.
Unlike IRS rules for most businesses, which do allow business losses, the IRS
has pretty much consistently ruled against professional gamblers, saying they
cannot deduct losses greater than wins.

You probably should consult an accountant actually familiar with gambling -
such as Marissa Chien (co-author of Tax Help For the Frugal Gambler) for
advice. Gambling is treated differently by the IRS than other businesses
(unfairly so, in my opinion, but that is the way it is), and most accountants don't
deal with gambling and don't know this.

As for your state taxes, they may be a totally different matter where your S
Corp. is needed. Or not. It could be that for filing as a business with a
state, different rules are given than for Federal rules.

Also - it could be that while you are paid your W2Gs with your SS # - you
can put this money into your S Corp. I really don't know anything about S
versus other types of corporations. You need to talk to the accountant about
this.
<BR><BR><BR>**************************************<BR> AOL now offers free
email to everyone. Find out more about what's free from AOL at
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#2

<<Also - it could be that while you are paid your W2Gs with your SS # - you
can put this money into your S Corp. I really don't know anything about S
versus other types of corporations. You need to talk to the accountant about
this.>>

We have had a S Corp for years. At first we thought we would give our business EIN for the W2G instead of our SS. However, we soon found out that casinos do not want to do this. Just as well, because
we do not want to draw attention to ourselves and have the casinos think of us as "professional gamblers."

But as MissCraps suggested, you do not need a S Corp - you can file Schedule C as a professional gambler (if you qualify) and that would solve the problem in states where they do not allow deductions for gambling losses.

···

________________________________________
Jean $¢ott - "FRUGAL VIDEO POKER"
This new book (autographed) and other
   frugal products are now available at my
   new Web site, http://queenofcomps.com/.
   E-mail address is queenofcomps@cox.net.

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

#3

I'm no accountant, but from my research on taxes, I think your

accountant

probably gave you some bad or at least incomplete advice. If you

want to file

as a Professional Gambler, you don't need to have an S Corp. You

can use

your own SS #. But you will have to qualify as a business under

IRS rules.

This means having a profit in 3 out of 5 years, and being a full-

time gambler.

Those people who have a "real" job and also gamble a lot, who have

filed as

Professional gamblers (Schedule C), often have problems proving to

the IRS

that they are engaging in a business and not a hobby.

Miss Craps: We are filing that way for 2006. We have complete
records, but my accountant says that a schedule "C" is an open
invitation to being audited, which we expect to go through, but is a
pain in the behind and costs me time and money. That is the reason
we became an "S" corporation where only the net of gains and losses
flows through as income to the owners in this case, me. Denny

  Also professional

gamblers have a difficult, if not impossible, deducting losses

larger than wins.

Unlike IRS rules for most businesses, which do allow business

losses, the IRS

has pretty much consistently ruled against professional gamblers,

saying they

cannot deduct losses greater than wins.

You probably should consult an accountant actually familiar with

gambling -

such as Marissa Chien (co-author of Tax Help For the Frugal

Gambler) for

advice. Gambling is treated differently by the IRS than other

businesses

(unfairly so, in my opinion, but that is the way it is), and most

accountants don't

deal with gambling and don't know this.

As for your state taxes, they may be a totally different matter

where your S

Corp. is needed. Or not. It could be that for filing as a

business with a

state, different rules are given than for Federal rules.

Also - it could be that while you are paid your W2Gs with your SS

# - you

can put this money into your S Corp. I really don't know anything

about S

versus other types of corporations. You need to talk to the

accountant about

this.
<BR><BR><BR>**************************************<BR> AOL now

offers free

···

--- In vpFREE@yahoogroups.com, misscraps@... wrote:

email to everyone. Find out more about what's free from AOL at
http://www.aol.com.

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

#4

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

<<Also - it could be that while you are paid your W2Gs with your SS

# - you

can put this money into your S Corp. I really don't know anything

about S

versus other types of corporations. You need to talk to the

accountant about

this.>>

We have had a S Corp for years. At first we thought we would give

our business EIN for the W2G instead of our SS. However, we soon
found out that casinos do not want to do this. Just as well, because

we do not want to draw attention to ourselves and have the casinos

think of us as "professional gamblers."

But as MissCraps suggested, you do not need a S Corp - you can file

Schedule C as a professional gambler (if you qualify) and that would
solve the problem in states where they do not allow deductions for
gambling losses.

Jean: As I just posted a reply to another post on this subject,
Schedule C is an open invitation to an audit. Denny

···

________________________________________
Jean $¢ott - "FRUGAL VIDEO POKER"
This new book (autographed) and other
   frugal products are now available at my
   new Web site, http://queenofcomps.com/.
   E-mail address is queenofcomps@...

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

#5

I have personally filed a schedule C for over 15 years and have filed
them for others and know many additional people that file that way ...
as long as your business shows a net profit more years than not, it
will not usually trigger an audit.

What really triggers audits is schedule C's that have losses for
several years running.

This all goes back to the issue that in order to file as ANY kind of
business, gambling income has to show a profit more years than not.

I am not givin tax advice here, just sharing experience and opinion.

Lavona Rann

···

--- In vpFREE@yahoogroups.com, "denflo60" <dennis.florence@...> wrote:

but my accountant says that a schedule "C" is an open
invitation to being audited

#6

> but my accountant says that a schedule "C" is an open
> invitation to being audited

I have personally filed a schedule C for over 15 years and have

filed

them for others and know many additional people that file that

way ...

as long as your business shows a net profit more years than not, it
will not usually trigger an audit.

What really triggers audits is schedule C's that have losses for
several years running.

This all goes back to the issue that in order to file as ANY kind

of

business, gambling income has to show a profit more years than not.

I am not givin tax advice here, just sharing experience and opinion.

Lavona Rann

Lavonna: I will share your comments with my tax accountant. Thank
you so much. Denny

···

--- In vpFREE@yahoogroups.com, "Lavona Rann" <lrann2@...> wrote:

--- In vpFREE@yahoogroups.com, "denflo60" <dennis.florence@> wrote: