If a person only goes and gambles 5 times per year regardless of the wagered
amount, that may preclude him from filing schedule C. In reading government
regulations, I am not sure how many hours in a year are required; but I
would think gambling 5 times may be a stretch. I would think that one would
need to spend at least 1000 hours per year gambling and that still may not
be enough to satisfy the !RS. Maybe Dennis will find out something concrete
if he pursues his claim.
My understanding, which may well be incorrect, is that "professional gambler" is determined by the IRS NOT in terms of hours or dollars, but whether it is your primary professional activity. If I'm wrong, someone will surely say so. To me, this means you could work full time at a minimum wage job, but if you gambled enough and made more from it, gambling COULD be considered your primary profession.
The only situation I'm not sure about (well, I'm really not sure about any of it) is if you're retired, and gambling is now all you do, but your retirement income, whatever its source, but which is NOT earned income, is more than your gambling income, how that works out.
If I had ANY questions about my personal situation and how to file, professional or not, I'd seek advice from a tax professional for whom gambling tax law is NOT a minor part of their practice, i.e., they are expert in that area.
Finally, someone was concerned about the IRS over-stepping the law in this matter; while there is, of course, extensive tax law, I understand the IRS to have a LOT of authority and latitude in issuing REGULATIONS, which have the force of law, although (sometimes) easier to challenge in court, esp. if they may conflict with actual legislation, or if they appear to be unreasonable application of the law. Everything the IRS does, does NOT have to be completely established by legislation.
--Barry Glaze