[beaumo1985]

Question for the floor..

Those of you that do report gambling on your US taxes, what method do you use for tracking/recording?

I am going to be including gambling on my 2016 return for the 1st time so have been reading up on what is required. I see the 'session method' seems to be becoming the main method. However this is easy enough when it comes to casinos, or poker, etc, but what what about sports betting?

I mostly bet on soccer and horses. Can i tally my totals by day? or if i place say 10 bets in the morning on a saturday and then another 2 later on for a later kick off, does that need to be 2 sessions? Or does the session method not apply at all and i should just tally all wins and all losses?

Would appreciate any thoughts here, or insight on what you guys do. I don't think i am going to be able to itemize my deductions this year so unlikely i can report my losses, so session method could be good for me to use, hopefully some losses get lost along the way among some profitable sessions.

[jackkkk2009]

have never done that, donno how..

[Gooleez21]

Ahahaha

[dirtdog52658]

Move to Canada

[beaumo1985]

similarly, how would a bet be recorded if it settles on a different day? is the profit/loss associated with the session it was placed in, or the day it it settled and it become your money?

[SBE]

21st Century. Betting winnings are usually tax free. I wonder if somebody is interested in this ...

Never heared of a bettor who paid any taxes. The taxes are normally paid by bookies of their year's incomes,

but not by customers winnings ...

And if you reside in UK, while betting, I think you are "under UK law".

I lived (in past 15 years) in 3 different countries (but all in Europe) and never paid a penny of a tax on winnings ...


If so, they should refund also all my losses then :-) ...


And how would Barack find you are betting ? If you would have Skrill (or Neteller) along with a bank card, you

can spend the money (of winnings) in UK, paying in shops, etc. - nobody will report it to US ...

[drjohn]

you need to hire an accountant and a tax consultant, they will take care of this for you ...

[rangerz2478]

21st Century. Betting winnings are usually tax free. I wonder if somebody is interested in this ...

Never heared of a bettor who paid any taxes. The taxes are normally paid by bookies of their year's incomes,

but not by customers winnings ...

And if you reside in UK, while betting, I think you are "under UK law".

I lived (in past 15 years) in 3 different countries (but all in Europe) and never paid a penny of a tax on winnings ...


If so, they should refund also all my losses then :-) ...


And how would Barack find you are betting ? If you would have Skrill (or Neteller) along with a bank card, you

can spend the money (of winnings) in UK, paying in shops, etc. - nobody will report it to US ...

So you would advise a professional gambler not to pay taxes either?

[SBE]

So you would advise a professional gambler not to pay taxes either?

What do you mean " a professional gambler " ? I did not know it does really exist (I mean for governments, etc.). I am afraid no such

occupation is really written anywhere. Yes, I know, you probably mean people who are living of winnings (of betting). How many people

are there in the world ? 0.001 % of all bettors ? So then he would have to pay social insurance, too. And if he pays the taxes (of winnings) along with the social insurance (sorry for my English, as well as sorry for describing this, I do not know how it works in his, or your country). I mean, if you have a "normal job" , earning money and paying taxes + all other (compulsary) fees, and once you are retired (at the age, let's say of 65 , or so), the state (government) will start to pay you the pension.

Do you really think, if you are "a professional gambler" - will also your country pension system pay you ? I doubt no ...

As "the professional gambler" does not exist, as an occupation (job). If it does - will you send me a link, please ? As I can see it in a list ? Thank you.


Yes, I pay health insurance myself, as I can go to a doctor. This must be paid by everybody ...

But the other fees - no, I will not get any money, any pension (once I am 65) from the state, so I must save some money untill I am a pensionist ... I am doing this "job" for over 16 years ...But if somebody asks me what am I doing, if I tell him "earning by betting and living of it" he would only laugh at me and nobody would trust me ...

[SBE]

So you would advise a professional gambler not to pay taxes either?

Well, searching a little bit.

www.bls.gov/oes/current/oes_stru.htm#00-0000


A list of occupations, with its codes, etc.

But I cannot fiand "a professional gambler " there. Am I blind ?


Will be searching further, maybe once I discover a country, where the "job" we are talking about is included.

But for sure, it will not be Saudi Arabia, UAE or even not Iran

[relaaxx]

just in general. whatever you win(money sent to you from a sportsbook) during the year minus what you can prove as related gambling loses(money you sent to a sportsbook). enter that amount under miscellaneous income.

[SBE]

In the end, maybe really something here:

professionalgamblerstatus.com


My English is very poor, having no nerves to study it - it would took me hours ...

But it seems, some crazy "advosors" are recommending when to pay the tax (of winnings) .

I will not be one of them. Luckily not being a citizen of the USA. Say hello to Barack, Hillary and Donald .. :-)

[SBE]

just in general. whatever you win(money sent to you from a sportsbook) during the year minus what you can prove as related gambling loses(money you sent to a sportsbook). enter that amount under miscellaneous income.

Yes, you are (generally) right. But who will be doing the records and how ? It takes hours to find a betting events, etc. ...

Yes , I know, it is "a huge crime" (not paying taxes of winnings; who will determine, I am casual or professional ? where is the border ?) , bigger than if killing somebody ...

[SBE]

Ahahaha

[SBE]

you need to hire an accountant and a tax consultant, they will take care of this for you ...

Good recommendation.

An example, a year's net income (of betting):

1 000 USD

Accountant fees : 500

Tax consultant fees : 500

After that, 0 (ZERO) real earnings, so 0 tax to pay, but everybody will be satisfied :-).



Sorry, I understand, you only wanted to help him ...and I am so stupid ...

[SBE]

As not to be presented here like a criminal or a gangster, I must admit, I would not have a problem to pay all that fees and taxes, but only if:

Once I reach the pensioner age (let's say 65 or 67, depends on the country), the state body (sorry, I do not know how to call it) must pay me the pension - as I was normally paying everything as I had to, as "the professional gambler".

But I am in 99,99 % sure, if I visit an appropriate office and tell them:

I am a professional gambler and I would like to pay everything as I would be occupied (as other "normal people"),

they would only laugh at me: "Gambler, really, and do you come from Mars or from another planet ?".


They would say: "no, it is not possible, you must have "a normal job", otherwise we cannot enter you to the system ... ".

I am afraid, gamblers are " out of the system" some way ...


Or do you know about any country in the world which allows / accepts this "occupation" ? If so - I move there. And will be paying everything (further 20 years) as I should, to be getting the pension every month then ...


Thank you in advance ...

[beaumo1985]

just in general. whatever you win(money sent to you from a sportsbook) during the year minus what you can prove as related gambling loses(money you sent to a sportsbook). enter that amount under miscellaneous income.

This is definitely incorrect. You are not allowed to just net your wins and losses and report that. You have to report wins and then list losses separately under deductions.

You are though allowed to record by the session. Easy enough when your sat at a roulette table or whatever, but I'm trying to figure out a method of doing it with sports betting, where i might for example spend a saturday morning betting on all different games at different books, etc, sometimes includes games that day, some will be the next day or even a few days later so its not so obvious how to include those within a "gambling session".

For those asking why id ever be reporting for taxes I assume you're in the UK or at least not in the US. Im from the UK originally and obviously prefer that system, but here in the US it would be illegal for me to not to report and pay taxes on my gambling.

[Krashman]

just in general. whatever you win(money sent to you from a sportsbook) during the year minus what you can prove as related gambling loses(money you sent to a sportsbook). enter that amount under miscellaneous income.

I remember a few years back an American gambler posted that he did report gambling income in this fashion including notes at how he calculated the amount and it triggered an audit because he reported his net income as gross income. So you are probably required to report gross income and your losses are reported as a business loss deduction.

My advice to the OP: go see an accountant.

[relaaxx]

i did say just in general. if hit the lottery for 10000. you claim the 10000 as income. gambling income in the miscellaneous income section. if you have loses with losing lottery tickets on hand to prove you lost say 2000. you can claim that. before offshore gambling. at least i thought you could. i hit at the track for 3400. they took taxes out for the win when i claimed the ticket. when i did my taxes i claimed the difference as income and claimed the amount they took out as deductions, i also claimed losses of 1500 something with losing stubs i kept after winning. they disallowed the 1500 deduction and wanted the money back. about 20% of the 1500. was a long time ago over 35 years ago but that's how i remember it. i did not question them when i got the notice. just payed them around 200-300 (depending on my tax bracket then) of the extra 1500 claimed and never heard from them again. i would not want anyone here to not get better advice than a sports forum for something as serious as taxes. just in general if you want to figure out what you might owe, it's not a bad way to get to a guesstamation.

[beaumo1985]

right, but your initial point was that you can use what you won, minus what you lost and put that as miscellaneous income. Which is incorrect. In your lottery example, you win 10k, but lose 2k, you can't put 8k as your income. You have to report both ends.

Using the session method it does effect how much you'll pay, which is why I'm trying to figure out the best way to do it, or what other people have done.

You can only claim the losses if you are itemizing expenses. So its better to have your losses spread among profitable sessions. For example a session where If I had 3 losing sessions of $50 a time, then a $200 winning session, then i'd get taxed on $200 of income. Whereas if all those bets are in the same 'session' then I would only be taxed on $50 of winnings. Sports betting its a bit harder to define a session than say a game of poker, or a night of blackjack. Since i tend to bet on a number of games and markets in one go... not all of them settle within the same period of time. If i make $100 worth of bets one day, and then a couple of days later one of them give me $50 of winnings, is that then part of the original session or what?

There's very little guidance online for recording sports bets.

[relaaxx]

i see your point. i was just say a quick guess if you win a lot to see what you might owe. might owe, around.

[Optional]

right, but your initial point was that you can use what you won, minus what you lost and put that as miscellaneous income. Which is incorrect. In your lottery example, you win 10k, but lose 2k, you can't put 8k as your income. You have to report both ends.

Using the session method it does effect how much you'll pay, which is why I'm trying to figure out the best way to do it, or what other people have done.

You can only claim the losses if you are itemizing expenses. So its better to have your losses spread among profitable sessions. For example a session where If I had 3 losing sessions of $50 a time, then a $200 winning session, then i'd get taxed on $200 of income. Whereas if all those bets are in the same 'session' then I would only be taxed on $50 of winnings. Sports betting its a bit harder to define a session than say a game of poker, or a night of blackjack. Since i tend to bet on a number of games and markets in one go... not all of them settle within the same period of time. If i make $100 worth of bets one day, and then a couple of days later one of them give me $50 of winnings, is that then part of the original session or what?

There's very little guidance online for recording sports bets.

Interesting info.

At least now I understand how they can tax gambling winnings without accepting liability for losses. Man what an awful system. Per session indeed. What a load of bollocks.

[Hareeba!]

Anyone who's betting seriously enough to record an annual net profit and is thus subject to tax should surely be recording all bets in a spreadsheet at least from which total profits and losses can readily be ascertained.

Fortunately, being in Australia, I don't have the problem but if I had to provide the numbers I could do so quite easily and if necessary obtain statements of all bets from the bookies I've used.

[beaumo1985]

My real problem is that I have been doing 'matched betting' which is basically for the uninitiated, bonus hunting.

I place a bet at one place and lay it off at an exchange. One bet wins the other loses and just about cancels the other out (usually with a small loss) but triggers the free bet.

The problem is, every single bet I place wins somewhere but also loses somewhere. 10s of thousands of dollars of winning bets, but a similar number of corresponding losses too, and my profit is only about $4-5k for the year. If I was literally reporting all the winning individual bets I would be adding thousands to my income. In my state you can't deduct the losses, so I would in theory be reporting and paying tax on every winning bet and not able to take into consideration that the same bets all had a loser as well.

For example.

A bookie offers a $20 free bet if I place a bet of $20 initially.

So I back team A to win at that bookie. Separately at an exchange I lay team A to win (so that bet wins if the team do not win). So whatever happens I have won a bet and lost a bet. But can then do the same thing with the free bet and lock in a profit.

How should/can I record this for tax purposes? My state does not allow me to deduct losses. So if I can only report the one that won then over the course of a year i would amass 10s of thousands of "winning" bets, even though in reality most have actually resulted in a net loss other than the free bets.

Would I be expected to log every single bet and thus show/report those 10s of thousands? Or can I do it by individual game or break it into sessions somehow to show what I was actually up/down from my betting that day?

In the example above, for the first part I would likely be down around $1 as one side won and the other lost. and then after the free bet maybe be up $15, again one side winning and the other. losing.. But if recorded the winning individual bets and unable to take into account losing individual bets, I'd be saying I won $19 and then $15.

i might being doing this 1-20 times over a day.. can I record the P/L by game instead or do the net of all the bets I placed in that session?

[Hareeba!]

My real problem is that I have been doing 'matched betting' which is basically for the uninitiated, bonus hunting.

I place a bet at one place and lay it off at an exchange. One bet wins the other loses and just about cancels the other out (usually with a small loss) but triggers the free bet.

The problem is, every single bet I place wins somewhere but also loses somewhere. 10s of thousands of dollars of winning bets, but a similar number of corresponding losses too, and my profit is only about $4-5k for the year. If I was literally reporting all the winning individual bets I would be adding thousands to my income. In my state you can't deduct the losses, so I would in theory be reporting and paying tax on every winning bet and not able to take into consideration that the same bets all had a loser as well.

For example.

A bookie offers a $20 free bet if I place a bet of $20 initially.

So I back team A to win at that bookie. Separately at an exchange I lay team A to win (so that bet wins if the team do not win). So whatever happens I have won a bet and lost a bet. But can then do the same thing with the free bet and lock in a profit.

How should/can I record this for tax purposes? My state does not allow me to deduct losses. So if I can only report the one that won then over the course of a year i would amass 10s of thousands of "winning" bets, even though in reality most have actually resulted in a net loss other than the free bets.

Would I be expected to log every single bet and thus show/report those 10s of thousands? Or can I do it by individual game or break it into sessions somehow to show what I was actually up/down from my betting that day?

In the example above, for the first part I would likely be down around $1 as one side won and the other lost. and then after the free bet maybe be up $15, again one side winning and the other. losing.. But if recorded the winning individual bets and unable to take into account losing individual bets, I'd be saying I won $19 and then $15.

i might being doing this 1-20 times over a day.. can I record the P/L by game instead or do the net of all the bets I placed in that session?

An utterly ludicrous situation if you truly aren't permitted to claim the losing matched bets. I suggest you obtain professional guidance on that issue. The law just can't be that unfair.

[kj8210]

Doesnt every book keep a log of your wins and losses including each wager placed, team, date, spread and amount? I don't keep my own personal log but if needed I think the one my book provides should suffice. I think for now I am going with total won as misc. income and then deduct losses in the gambling losses section.

[kj8210]

nvm

[Hu$tle]

if the the winnings are illegal online then what good is reporting them ???

[KVB]

It sounds like you are including gambling winnings in your taxes as opposed to filing as a professional gambler. These are two different things and what you do makes a difference.

As far as keeping track, keep it simple. Keep track of all your losses in the same way you keep track of your winnings. That’s it. Keep every ticket. Don’t worry about sessions and bullshit, just keep track of your losses.

I am not sure of your status but there are clear rules on whether or not you are “gambling for profit” as they would say.

Why are you making this choice to add gambling, or are you filing as a gambler? In either case there would be little reason to include winnings without itemizing the losses.

Unless you had an unexpected windfall, jackpot, etc, that would now make you want this year to be the year (or only for this year without expectation of doing it again) I don’t see why…and even then…you would at least begin itemizing losses.

Your goal here is important but you should seek a professional. I can tell you this, if you are filing as a pro gambler for profit and need to complete the requirements of Regs. Sec. 1.183-2 (b), it will look much better if you are using a professional consultant. In fact it is on the checklist.

Also for itemization, a pro status filer can use a Schedule C to itemize along with other costs of business. Your goal is important.

If you need losses, you can PM me and I will give you some guidance involving casinos but I am not a tax professional and you will still have to talk to them. Sometimes there are different legal roads to take, and not all tax preparers are knowledgeable of a dynamic return.

[KVB]

There can be so much more to this. Anything from casino comps and buy ins to the need for a player's card for tracking. It all depends on the "why's" of it all.

[Hareeba!]

if the the winnings are illegal online then what good is reporting them ???

Firstly, it's not against the law to bet online. Running a book is illegal. Placing a bet isn't.

Secondly, even if it were illegal it wouldn't make the winnings exempt from tax. (Remember Al Capone?)

[Optional]

Interesting info.

At least now I understand how they can tax gambling winnings without accepting liability for losses. Man what an awful system. Per session indeed. What a load of bollocks.

An utterly ludicrous situation if you truly aren't permitted to claim the losing matched bets. I suggest you obtain professional guidance on that issue. The law just can't be that unfair.

It's not possible to make a normal fair law to tax all gambling as that would mean subsidizing losses. And why most countries don't even try.

The system Beaumo describes sounds mental and kind of shockingly unfair.

[beaumo1985]

It sounds like you are including gambling winnings in your taxes as opposed to filing as a professional gambler. These are two different things and what you do makes a difference.

As far as keeping track, keep it simple. Keep track of all your losses in the same way you keep track of your winnings. That’s it. Keep every ticket. Don’t worry about sessions and bullshit, just keep track of your losses.

I am not sure of your status but there are clear rules on whether or not you are “gambling for profit” as they would say.

Why are you making this choice to add gambling, or are you filing as a gambler? In either case there would be little reason to include winnings without itemizing the losses.

Unless you had an unexpected windfall, jackpot, etc, that would now make you want this year to be the year (or only for this year without expectation of doing it again) I don’t see why…and even then…you would at least begin itemizing losses.

Your goal here is important but you should seek a professional. I can tell you this, if you are filing as a pro gambler for profit and need to complete the requirements of Regs. Sec. 1.183-2 (b), it will look much better if you are using a professional consultant. In fact it is on the checklist.

Also for itemization, a pro status filer can use a Schedule C to itemize along with other costs of business. Your goal is important.

If you need losses, you can PM me and I will give you some guidance involving casinos but I am not a tax professional and you will still have to talk to them. Sometimes there are different legal roads to take, and not all tax preparers are knowledgeable of a dynamic return.

My reason for reporting it is purely to comply with the law as it is income. All of it is done with my U.K. Bank account with U.K. Facing bookies, but I'm a tax resident in the US so expected to report worldwide income.

Would like to report as a pro ideally as then I can just deduct the losses but sounds like that is extremely difficult to have that pro status.

I do track wins and losses, but in my state I am not allowed to deduct the losses at all. So in theory I've got 10s of thousands of dollars of 'winnings' which I would pay 5% tax on even though my profit is about $4-5k

It's not unusual with matched betting to have over $1000 of 'winning bets' in a day, and yet all are layed off as well so I've made a loss or relatively small profit compared to that figure.

So since I discovered this I need to work out if I can record it differently, use the session method somehow, but I'm not sure how that works with sports.

[KVB]

I see, you are in the UK but paying US taxes.

The important thing is your records. I don't believe you need to worry about trying to calculate sessions, etc.

Keep every ticket, record every ticket, and be able to prove every ticket…especially the losses.

If it’s online, that could mean screenshots along with printouts. The tax court wants to basically be able to see a diary of your plays; the more information the better.

In fact, the IRS Revenue Procedure 77-29 tells you to get the names of other people who were present. That is, for example at a craps table. Now, session recording works better at a table because you aren’t expected to record every toss of the dice.

In sports, record every toss of the dice. Record every play…it’s either a win, or a loss. It’s too bad you can’t just net the two for final number, but the rules are that you have to deduct the losses.

This is on purpose by the IRS so that a potential “hidden” tax comes as your adjusted gross income could go up.

The IRS will want to know every possible detail once you start deducting. Right now, they will assume your losses in the standard deduction, but once you deduct losses the burden of proof is entirely on you.

Courts have used any random notes, calendars, witnesses, and even casino napkins in order to establish proof of play for players. I know you aren’t on a casino floor, but sports betting and horse racing are casino games for all practical purposes.

[beaumo1985]

thank you for the replies. To clarify i am in the US, the betting is online with UK facing bookies.

My reason for asking about the session records is because without it, i think I could owe huge amounts of tax, I'd likely have to pay more than i have profited, which to me seems unfair.

Did you understand what i meant by the strategy I've been using?

For example - i might receive from a bookmaker a promotional offer of "bet $20 on the soccer game between Team A & Team B, get a free $20 to bet on the game between Team C & Team D". There are quite a lot of these offers across all different bookmakers so I'm often doing quite a few in the same day/at the same time.

Step 1: BACK Team A to win with that bookmaker.
Step 2: LAY Team A to win with another bookmaker that offers an 'exchange' facility like betfair (LAY meaning that i am betting on them to not win).
Step 3: 2 bets have been placed - whatever the outcome of the game, one bet wins, one bet loses - most time I'm likely around $1-2 down at this point.
Step 4: I now have the free bet to use, so repeat Steps 1-3 but since one side was placed with a free bet i'll have made a small profit.

So.. if i had to report the total of every single one of those winning bets individually then id be in trouble. Each time i do the process there is a winning bet, and if i cant take the corresponding bet placed at the same time into account, then i could be adding tens of thousands of non existent income to my tax return.

In a morning of placing bets for example mostly on soccer games and horses, i could conceivably have $1000 or more worth of 'winnings' but would have a similar figure of 'losses' using the above method, maybe a small profit if i used a free bet or 2. Doing what you have said in your above post, I theoretically have to report $1000 of winnings for that day even though i made nowhere near that level of income overall.

Thats why I'm curious about the session method. Can i use that for sports? If Bet A and Bet B can be classed as being in the same session and i am allowed to record it as such, that would tell me the actual profit/loss made in that session, day or whatever.

In my state, i am not able to use losses as a deduction at all (though i could theoretically for federal). I make quite a high volume of bets over the course of the year chasing these small profits that add up. I would need to go back through my records, but as individual bets over the course of the year, i have likely made tens of thousands of 'winnings'. If i report those as individual bets winning and can't take into account the matched bet i placed at the same time that lost, I would be required to pay about 5% in state taxes.. which alone could be thousands. And the actual income i have made could even be less than what i had to pay in tax.