Who Gets Banned from Casinos?

[slobdinger]

Rob, great explanation on your early years in video poker. Thanks. And I know how you feel about slowing down from the gambling and smelling the roses. I've done the same. Oh, and you are drawing SS too? Congratulations! You are now part of the 47%. LOL.

[Alan Mendelson]

Alan, you are to honest. When you throw a backyard barbecue for family and friends....call it a convention and write if off as a business expense.

There's no reason to cheat. Besides, I've been audited twice. Both times -- no change.

My father told me, when I was growing up, it's good to pay taxes. Pity the people who don't pay taxes because it means they have no money.

[Rob.Singer]

I'm an author and a consultant, and a TV producer and host, and I produce and appear as a talent in commercials... and I only deduct expenses that are legitimately part of my work and business. I don't claim expenses that are not legitimate.

Are you saying that everything you claimed was associated with your business? Really, a hundred thousand dollars worth?

In my mind it was. In the IRS book, I think it was. In my audits? No problems, but I believe the auditors I faced didn't know how to approach or deal with how I did what I did. Just as I was told would be the case.

[quahaug]

You can have a loss on a Schedule C and use that to lower your overall tax bill. If any player shows a loss on a Schedule C it will hold up AS LONG as he doesn't show a loss for too many years. Then the Schedule C business is invalid and becomes a hobby. So the bottom line is you can't have a Schedule C business showing a profit for too many years.

Alan you're correct. You got me curious so I looked up the subject. It seems the courts have decided some of the IRS's policy for them as there were no steadfast rules in the code about deducting gambling losses. I agree that taking a loss could get sticky if done every year or in large amounts to offset too much other income. Of course that's true for any business, not just gambling.

[Rob.Singer]

Rob, great explanation on your early years in video poker. Thanks. And I know how you feel about slowing down from the gambling and smelling the roses. I've done the same. Oh, and you are drawing SS too? Congratulations! You are now part of the 47%. LOL.

SS is earned by working. What that 47% means is those on the Obama "handout" wagon.

[quahaug]

In my mind it was. In the IRS book, I think it was. In my audits? No problems, but I believe the auditors I faced didn't know how to approach or deal with how I did what I did. Just as I was told would be the case.

So the hundred grand per year was gross profit, not what you actually brought home?

[Alan Mendelson]

So the hundred grand per year was gross profit, not what you actually brought home?

Rob told us he averaged a net profit of $100,000 per year. Rob, that's correct?

[Boygenius]

Rob- you're a fraud. Plain and simple.

[slobdinger]

SS is earned by working. What that 47% means is those on the Obama "handout" wagon.

SS recipients are different than welfare/food stamp cases. They payed the tax for 40 years to get the check. But politicians lump the SS folks in with the welfare/food stamp cases to come up with the 47% number of people on some kind of government entitlement. Its called "lying with statistics."

[Dan Druff]

You can ALWAYS deduct gambling losses from gamblng wins in a calendar year. This is true if you're a professional gambler or just a recreational gambler.

So if you hit a $1,000,000 jackpot on January 1st, and then proceed to lose $990,000 gambling during the rest of the calendar year, you only need to pay taxes on $10,000 of gambling income. However, if you hit that $1,000,000 jackpot on December 31st and then lose it all the following month in January, you owe taxes on that million dollar hit! Sad, unfair, but true.

Wbere you benefit from filing as a professional gambler is the ability to deduct expenses related to gambling.

So if I, a professional gambler, win a $1,000,000 poker tournament in Atlantic City, I can deduct the costs of airfare, hotel, and food for the trip. If you, a recreational gambler, hit that same $1,000,000 payout, you cannot make such deductions.

With that said, I cannot see how one could legitimately claim $100,000 worth of expenses associated with video poker play. I can't see that passing an audit.

[Rob.Singer]

Rob told us he averaged a net profit of $100,000 per year. Rob, that's correct?

Net, of course. The avg. was between $90k & $100k. Qua is still batting zero.

[Rob.Singer]

You can ALWAYS deduct gambling losses from gamblng wins in a calendar year. This is true if you're a professional gambler or just a recreational gambler.

So if you hit a $1,000,000 jackpot on January 1st, and then proceed to lose $990,000 gambling during the rest of the calendar year, you only need to pay taxes on $10,000 of gambling income. However, if you hit that $1,000,000 jackpot on December 31st and then lose it all the following month in January, you owe taxes on that million dollar hit! Sad, unfair, but true.

Wbere you benefit from filing as a professional gambler is the ability to deduct expenses related to gambling.

So if I, a professional gambler, win a $1,000,000 poker tournament in Atlantic City, I can deduct the costs of airfare, hotel, and food for the trip. If you, a recreational gambler, hit that same $1,000,000 payout, you cannot make such deductions.

With that said, I cannot see how one could legitimately claim $100,000 worth of expenses associated with video poker play. I can't see that passing an audit.

That's incomplete info Dan. You can deduct gambling losses from winnings on Schedule C (pro gambler) dollar-for-dollar with no ill effect. Do that on Schedule A (rec gambler) and in addition to overall deduction limitations coming into play, you end up with an AGI that can be unforgiving, a bout with AMT....or both.

Again, I was not deducting expenses solely related to vp play. I was an author, writer, and consultant as well. While I'm on this subject, please take a moment to reflect on how many times you find yourself not able to understand how I was able to accomplish the things that I did...And in part, continue to do. It is the exact same criticism I've come across since I started, and it has always been leveled by people who have very little knowledge about my play strategy, they prefer to stay in the dark so they can keep criticizing, and unlike what I've done in preparation of and during my time as a professional player & trainer, they have never studied every aspect of what's required in order to get every aspect right.

[quahaug]

Net, of course. The avg. was between $90k & $100k. Qua is still batting zero.

So does that mean you paid taxes on that 90-100 thousand net income?

[redietz]

While I'm on board with much of what Rob is saying here, as he managed to bundle his high-profile writing and gambling together and claim virtually everything he did as an expense, which is legit, my question is how he managed to sustain that for 10 years.

If he bought stuff up front that would depreciate immensely, I guess you could pull it off, but what the heck could you buy that would work for video poker or journalism?

At the time, it was very difficult to keep zeroing out income for more than a five year stretch. As I recall, you could get away with demonstrating losses for three out of five years without it being defined as a hobby, but questions would be asked. You could also take a loss almost every year if you started out with a horrendous loss the first year, then showed significant improvement over time so that any reasonable projection would show probable profits going forward to years six, seven, and so on.

But to pull this off for 10 years requires angles I don't recall.

Rob, regnis, Alan? Help me out here.

[Alan Mendelson]

I can't imagine how Rob offset all profits so he had a zero tax bill.

For writing and consulting the following can be legitimate tax deductions:

Entertainment expenses, meals, supplies, gifts, rent, utilities, subscriptions, phone bills, utilities, travel, tips and so forth. You get the idea -- there are a lot of things which can be used to offset income.

The question is are these expenses for his work or regular living? Taking your wife to dinner or paying for the rent on your non-working residence would not qualify.

I report my business income on a Schedule C but I can't write off my normal living expenses. For example I can write off my car trips to a client but not my car trips to a girlfriend.

[Alan Mendelson]

Regarding a million dollars win on December 31st: don't forget you can use losses from earlier that year to offset that. I have losses before I hit my $100,000 royal as well as losses from play after it. But I am not a professional gambler and I can't use a Schedule C to write off other expenses.

[quahaug]

If you zero out your income with legit real deductions you wouldn't have a profit left over to pay your bills or buy toys with.

[Alan Mendelson]

If you zero out your income with legit real deductions you wouldn't have a profit left over to pay your bills or buy toys with.

This is true. But Rob said he had his wife's income.

But I'm still confused: Rob doesn't have another job, spends all of his VP income on expenses, yet retires early and buys a monster RV and builds a house too?

[Rob.Singer]

So does that mean you paid taxes on that 90-100 thousand net income?

It means I had deductions etc. enuf to offset those winnings, every single year. We did not ever have an overall zero tax bill.

[Rob.Singer]

This is true. But Rob said he had his wife's income.

But I'm still confused: Rob doesn't have another job, spends all of his VP income on expenses, yet retires early and buys a monster RV and builds a house too?

Alan you're being a funny guy about this. For the 4th time--do you know what a 401k is?? Truthfully? Or is it merely three numbers and a letter to you, and something that can't possibly be defined by seven figures? But at least you understand that my wife had a healthy income along with the health insurance for us.