BBB is going to have a huge impact on sports gambling

[615dawg]

Sidenote: I have libertarian streak in me and I do not care what an individual does with their money. However, I am watching a lot of people close to me develop a sports gambling addiction that is starting to affect people they love. Its never been easier to gamble on sports.

One piece of the BBB that is being overlooked is how gambling winnings are taxed. Right now, you are taxed on profit. If you lose $100,000 in bets and win $102,000 in bets, you get taxed on the $5,000 you make. Now, you can only count 90% of your losses, so now you are taxed on $12,000 when you won $2,000. Depending on the tax bracket, you could pay more than $2k in taxes on your winnings.

 

[jethreauxdawg]

Sidenote: I have libertarian streak in me and I do not care what an individual does with their money. However, I am watching a lot of people close to me develop a sports gambling addiction that is starting to affect people they love. Its never been easier to gamble on sports.

One piece of the BBB that is being overlooked is how gambling winnings are taxed. Right now, you are taxed on profit. If you lose $100,000 in bets and win $102,000 in bets, you get taxed on the $5,000 you make. Now, you can only count 90% of your losses, so now you are taxed on $12,000 when you won $2,000. Depending on the tax bracket, you could pay more than $2k in taxes on your winnings.

I’m with you. Let people deal with their bad decisions. I do not like that it is so easy to gamble now. I see people losing money they don’t have.
But if someone is ok risking $100k on sports to win $2k, they probably aren’t good enough at math to be concerned about the taxes.

 

[missouridawg]

Sidenote: I have libertarian streak in me and I do not care what an individual does with their money. However, I am watching a lot of people close to me develop a sports gambling addiction that is starting to affect people they love. Its never been easier to gamble on sports.

One piece of the BBB that is being overlooked is how gambling winnings are taxed. Right now, you are taxed on profit. If you lose $100,000 in bets and win $102,000 in bets, you get taxed on the $5,000 you make. Now, you can only count 90% of your losses, so now you are taxed on $12,000 when you won $2,000. Depending on the tax bracket, you could pay more than $2k in taxes on your winnings.

I'm really baffled at how this is all tracked and recorded.

I got hot in Vegas a few years back. I turned a $1000 chip stack at a table game into over $21,000 is the span of about 2 hours. It was one of those god-send hot-runs. I stopped and went to bed.

When I got up to leave, they gave me chips.
When I went to cash those chips, they required me to fill out tax paperwork.
How do they know how much I lost before putting that $1000 on the table?

After playing a little more the next afternoon (and a little more loosely), I walked away from my Vegas trip up more than $17000. Does losing this $4000 count in my tax calculations?

I just don't understand how this is policed.

Maybe for the gambling apps it's a little more cut and dry and a log can be kept.

 

[615dawg]

I'm really baffled at how this is all tracked and recorded.

I got hot in Vegas a few years back. I turned a $1000 chip stack at a table game into over $21,000 is the span of about 2 hours. It was one of those god-send hot-runs. I stopped and went to bed.

When I got up to leave, they gave me chips.
When I went to cash those chips, they required me to fill out tax paperwork.
How do they know how much I lost before putting that $1000 on the table?

After playing a little more the next afternoon (and a little more loosely), I walked away from my Vegas trip up more than $17000. Does losing this $4000 count in my tax calculations?

I just don't understand how this is policed.

Maybe for the gambling apps it's a little more cut and dry and a log can be kept.

I think if you use the apps (MGM, ESPN, FanDuel, etc.) you get a tax form.

 

[GloryDawg]

I'm really baffled at how this is all tracked and recorded.

I got hot in Vegas a few years back. I turned a $1000 chip stack at a table game into over $21,000 is the span of about 2 hours. It was one of those god-send hot-runs. I stopped and went to bed.

When I got up to leave, they gave me chips.
When I went to cash those chips, they required me to fill out tax paperwork.
How do they know how much I lost before putting that $1000 on the table?

After playing a little more the next afternoon (and a little more loosely), I walked away from my Vegas trip up more than $17000. Does losing this $4000 count in my tax calculations?

I just don't understand how this is policed.

Maybe for the gambling apps it's a little more cut and dry and a log can be kept.

I don't gamble but I have never heard of that, and I know a lot of people who go to casinos in miss. That might be a Nevada deal.

 

[missouridawg]

I don't gamble but I have never heard of that, and I know a lot of people who go to casinos in miss. That might be a Nevada deal.

I actually asked for my chips back before I filled the paperwork out and I was going to turn them in, in small batches. They wouldn't even give me my chips back.

 

[FormerBully]

Sidenote: I have libertarian streak in me and I do not care what an individual does with their money. However, I am watching a lot of people close to me develop a sports gambling addiction that is starting to affect people they love. Its never been easier to gamble on sports.

One piece of the BBB that is being overlooked is how gambling winnings are taxed. Right now, you are taxed on profit. If you lose $100,000 in bets and win $102,000 in bets, you get taxed on the $5,000 you make. Now, you can only count 90% of your losses, so now you are taxed on $12,000 when you won $2,000. Depending on the tax bracket, you could pay more than $2k in taxes on your winnings.

I am a lot like you politically. Let people do what they want, but the way these companies market is dangerous. This is a great watch.

 

[Perd Hapley]

Wait a minute, you can actually write off gambling LOSSES? That’s actually a thing? Even if its only 90%, that’s 17ing absurd.

 

[8dog]

I'm really baffled at how this is all tracked and recorded.

I got hot in Vegas a few years back. I turned a $1000 chip stack at a table game into over $21,000 is the span of about 2 hours. It was one of those god-send hot-runs. I stopped and went to bed.

When I got up to leave, they gave me chips.
When I went to cash those chips, they required me to fill out tax paperwork.
How do they know how much I lost before putting that $1000 on the table?

After playing a little more the next afternoon (and a little more loosely), I walked away from my Vegas trip up more than $17000. Does losing this $4000 count in my tax calculations?

I just don't understand how this is policed.

Maybe for the gambling apps it's a little more cut and dry and a log can be kept.

It’s probably a CTR report like banks require. They don’t known but it gets reported so someone can ask questions. Then it’s up to you to show the math.

 

[patdog]

I'm really baffled at how this is all tracked and recorded.

I got hot in Vegas a few years back. I turned a $1000 chip stack at a table game into over $21,000 is the span of about 2 hours. It was one of those god-send hot-runs. I stopped and went to bed.

When I got up to leave, they gave me chips.
When I went to cash those chips, they required me to fill out tax paperwork.
How do they know how much I lost before putting that $1000 on the table?

After playing a little more the next afternoon (and a little more loosely), I walked away from my Vegas trip up more than $17000. Does losing this $4000 count in my tax calculations?

I just don't understand how this is policed.

Maybe for the gambling apps it's a little more cut and dry and a log can be kept.

If you're a member of their frequent gambler program, they track the losses for you. If not, they don't know and it's your responsibility to track it. Also, unless you're an infrequent gambler who just hit a lucky big jackpot, your losses almost certainly more than offset your winnings, even with only 90% being deductible.

 

[8dog]

Wait a minute, you can actually write off gambling LOSSES? That’s actually a thing? Even if its only 90%, that’s 17ing absurd.

Only to the extent of winnings. If you have a net loss of 10k you don’t get to deduct 9k.

 

[615dawg]

I am a lot like you politically. Let people do what they want, but the way these companies market is dangerous. This is a great watch.

That video is spot on from what I have witnessed.

 

[missouridawg]

It’s probably a CTR report like banks require. They don’t known but it gets reported so someone can ask questions. Then it’s up to you to show the math.

This makes sense. I never reported it and was never questioned on it.

 

[WrightGuy821]

Wait a minute, you can actually write off gambling LOSSES? That’s actually a thing? Even if its only 90%, that’s 17ing absurd.

It's not as much writing off as it is deducting from your winnings. If you have gambling winnings, you can deduct losses up to your winnings. If you only have losses, you can't deduct from taxable earnings. You can't cheat the system by losing a bunch of money gambling lol

 

[patdog]

This makes sense. I never reported it and was never questioned on it.

If you won $21,000 they should have issued you a W2-G (why they call this a W2 and not a 1099 is a mystery to me). And if you didn't report it, you should have received a tax notice. How long ago was this? Typically they won't get around to sending the notice for 2-3 years. But as 17ed up as they've been since Covid, who knows how much they've just missed.

 

[CochiseCowbell]

It took me entirely too long to realize this wasn't about the Better Business Bureau.

 

[missouridawg]

If you won $21,000 they should have issued you a W2-G (why they call this a W2 and not a 1099 is a mystery to me). And if you didn't report it, you should have received a tax notice. How long ago was this? Typically they won't get around to sending the notice for 2-3 years. But as 17ed up as they've been since Covid, who knows how much they've just missed.

2021

 

[msudawg200]

It took me entirely too long to realize this wasn't about the Better Business Bureau.

I thought for sure this was about Big Baller Brand finally making its breakthrough**

 

[Colonel Angus.sixpack]

I lose every bet I place as far the feds know.

 

[patdog]

2021

Interesting. You may be safe. They generally can't go back more than 3 years from the date you filed your income tax return, unless there's a substantial understatement of tax.

 

[Willow Grove Dawg]

The casinos track & maintain an incredible amount of data especially if you are a member of their rewards/players program. Pit bosses at the table games are constantly recording the amount of $/chips players have put into game, take out of a game, & average bets. Some of the casino groups track it all electronically with markers in the chips & readers on the tables. MGM (for example) gives players the ability to print a win/loss statement online from their website - this is the information that they provide the IRS annually.

 

[GloryDawg]

If you won $21,000 they should have issued you a W2-G (why they call this a W2 and not a 1099 is a mystery to me). And if you didn't report it, you should have received a tax notice. How long ago was this? Typically they won't get around to sending the notice for 2-3 years. But as 17ed up as they've been since Covid, who knows how much they've just missed.

Does that consider passive income or earned?

 

[patdog]

Does that consider passive income or earned?

If you're a professional poker player, I would think would be earned income reported on Schedule C (I've never researched this though). For most, it's just other passive income reported as other income.

 

[Perd Hapley]

Only to the extent of winnings. If you have a net loss of 10k you don’t get to deduct 9k.

But if you win $10k on one bet and lose $8k on another, you’re only getting taxed on like $2500 or something. That’s basically the same as a tax break, considering that you can just claim fake losses to offset whatever you win, with no repercussions whatsoever.

There shouldn’t be any tax incentive whatsoever to gambling. Bets should be individually taxed if you win…..no tax or tax break if you lose. It’s far too easy to take advantage of a system where you can just say “oh I lost $5k that one night” when you can just say you bought in with cash and then lost all your chips. That’s completely untraceable.

 

[8dog]

But if you win $10k on one bet and lose $8k on another, you’re only getting taxed on like $2500 or something. That’s basically the same as a tax break, considering that you can just claim fake losses to offset whatever you win, with no repercussions whatsoever.

There shouldn’t be any tax incentive whatsoever to gambling. Bets should be individually taxed if you win…..no tax or tax break if you lose. It’s far too easy to take advantage of a system where you can just say “oh I lost $5k that one night” when you can just say you bought in with cash and then lost all your chips. That’s completely untraceable.

You can claim fake anything on your taxes. But if you got called on it they are going to want you to show your work.

 

[RocketDawg]

This makes sense. I never reported it and was never questioned on it.

Just tell them it was a tip and be done with it. Or overtime.

 

[CaptainFalcon]

CPA here. I deal with a handful of clients that do a lot of gambling. It depends the game/event you are betting on but if you win over a certain amount (usually low four figures), you get issued a W-2G that shows your gambling winnings. It does not show losses. In my experience, the record keeping that most people turn in for gambling losses is… not great. You kinda have to take the person’s word for it. And almost every client I’ve worked with claims that they lost more than they won every year. Obviously there are some statements that casinos are able to provide but a lot of people don’t go to the trouble of tracking that down. Also not always an exact science to track depending on how you are betting.

You can only deduct up to the amount of your winnings so it’s not like you can report you won $5,000 and then claim a $20,000 loss and get to claim all of it. You’d only get to basically negate the $5,000 winnings with $5,000 of losses to get you to a net zero.

Some winnings have taxes withheld on them too. Apparently there actually used to be a big loophole in Mississippi years ago where people could write off all their gambling winnings but claim the state tax withholding and get huge refunds from losing their rear ends on gambling. But the Dept. of Rev. closed that loophole a long time ago, before I was practicing so not exactly sure when that was.

I went into public accounting in 2016, learned a lot about the tax code, and then Trump got elected and passed the TCJA about a year onto the job for me and I had to learn a bunch of new ways of doing things early in my career. Don’t think the changes this time around will be quite as large, but definitely will be a few differences.

 

[grandprairiedog]

I don't gamble but I have never heard of that, and I know a lot of people who go to casinos in miss. That might be a Nevada deal.

If you invest in anyway in the stockmarket, then you indeed gamble. Difference is, your chance of winning are notedly higher.

 

[GloryDawg]

If you invest in anyway in the stockmarket, then you indeed gamble. Difference is, your chance of winning are notedly higher.

I agree but since I have a pension that will pay me 70% of my five best years, I put 4% into my 401K each paycheck, my company matches my contribution, and since I am 60 years old, I can take it out without any penalties only owing federal taxes. I am basically using it as extra income while I work. It's not a gamble for me. One thing our 401K's contribution goes into a fund. I have a selection of funds to choose from. Those funds go down, but they never stay down. It's really not that big of a gamble. Historically the Market has always been up more than down.

 

[Perd Hapley]

You can claim fake anything on your taxes. But if you got called on it they are going to want you to show your work.

So you pull out a piece of paper where you wrote down how much cash you bought in with, before “losing everything”.

In general, it’s completely pointless for it to be in the tax code if it is that easy to circumvent. Even reporting mileage on your business vehicle has more of an audit trail than alleged gambling losses.

 

[8dog]

So you pull out a piece of paper where you wrote down how much cash you bought in with, before “losing everything”.

In general, it’s completely pointless for it to be in the tax code if it is that easy to circumvent. Even reporting mileage on your business vehicle has more of an audit trail than alleged

It’s just odd that if someone goes to a blackjack table for 5 minutes and wins four $250 hands but loses eight $250 hands that you want them to claim $1000 in income.

 

[dawgstudent]

It’s just odd that if someone goes to a blackjack table for 5 minutes and wins four $250 hands but loses eight $250 hands that you want them to claim $1000 in income.

$250 hands? @8dog is a high stepper.

 

[MagnoliaHunter]

I don't gamble but I have never heard of that, and I know a lot of people who go to casinos in miss. That might be a Nevada deal.

If you are referring to the tax paperwork. They do it in Mississippi too and have for at least 35 years if you win $1000.00 or more. 35 years ago was the first time I won over $1000 at the casino.

 

[mstateglfr]

Do you have to account for the free drinks when determining your losses? Back in college I was a winner every time if I had to factor the comped drinks into my inevitable slow loss at the Roulette table every time I was dragged along down to the Golden Moon in the first year or so it was open.

 

[jethreauxdawg]

Do you have to account for the free drinks when determining your losses? Back in college I was a winner every time if I had to factor the comped drinks into my inevitable slow loss at the Roulette table every time I was dragged along down to the Golden Moon in the first year or so it was open.

My favorite justification: when I add in the perks, they are paying me to gamble.

 

[8dog]

$250 hands? @8dog is a high stepper.

I was trying to be modest with my examples too

 

[Seinfeld]

I'm really baffled at how this is all tracked and recorded.

I got hot in Vegas a few years back. I turned a $1000 chip stack at a table game into over $21,000 is the span of about 2 hours. It was one of those god-send hot-runs. I stopped and went to bed.

When I got up to leave, they gave me chips.
When I went to cash those chips, they required me to fill out tax paperwork.
How do they know how much I lost before putting that $1000 on the table?

After playing a little more the next afternoon (and a little more loosely), I walked away from my Vegas trip up more than $17000. Does losing this $4000 count in my tax calculations?

I just don't understand how this is policed.

Maybe for the gambling apps it's a little more cut and dry and a log can be kept.

I’ve dealt much more with sites like DraftKings over the years than casinos, but I can confirm that tax season with this stuff is a $hitshow

I played a weekly PGA contest for a couple years where you buy cards(NFTs) and then use your cards to create lineups. Now, if you win $500 from those contests, it was obvious that you’d be taxed on those winnings. However, what about when you win another NFT? How do you determine that NFT’s value? What about all the money the player spent to collect enough of these NFTs to be able to play?

Long story short, some CPA at DraftKings came up with a formula, and everybody got a tax form in February with a seemingly random amount of cash that must be claimed.

 

[GloryDawg]

If you are referring to the tax paperwork. They do it in Mississippi too and have for at least 35 years if you win $1000.00 or more. 35 years ago was the first time I won over $1000 at the casino.

I just didn't know. The only gambling I do is putting my 60-year-old body under 365 pounds while working out on the bench.

 

[patdog]

CPA here. I deal with a handful of clients that do a lot of gambling. It depends the game/event you are betting on but if you win over a certain amount (usually low four figures), you get issued a W-2G that shows your gambling winnings. It does not show losses. In my experience, the record keeping that most people turn in for gambling losses is… not great. You kinda have to take the person’s word for it. And almost every client I’ve worked with claims that they lost more than they won every year. Obviously there are some statements that casinos are able to provide but a lot of people don’t go to the trouble of tracking that down. Also not always an exact science to track depending on how you are betting.

You can only deduct up to the amount of your winnings so it’s not like you can report you won $5,000 and then claim a $20,000 loss and get to claim all of it. You’d only get to basically negate the $5,000 winnings with $5,000 of losses to get you to a net zero.

Some winnings have taxes withheld on them too. Apparently there actually used to be a big loophole in Mississippi years ago where people could write off all their gambling winnings but claim the state tax withholding and get huge refunds from losing their rear ends on gambling. But the Dept. of Rev. closed that loophole a long time ago, before I was practicing so not exactly sure when that was.

I went into public accounting in 2016, learned a lot about the tax code, and then Trump got elected and passed the TCJA about a year onto the job for me and I had to learn a bunch of new ways of doing things early in my career. Don’t think the changes this time around will be quite as large, but definitely will be a few differences.

I had a client once who would turn in about 70 or so W2-G's every year. All for low 4 figures. He had no records to support his losses, but said he lost more than he won. I thought, I know for a fact you lost more than you won. No one could possibly have that many fairly small wins and still be up on the casino.

 

[greenbean.sixpack]

I know many people who gamble on sports, all of them are mostly >$20 bettors with an occasional $100. Most understand that they aren’t going to make money, in the long run, off sports gambling. Like Fantasy Football, it’s entertainment.