I am a novice to the sportsbetting industry, so pardon me if I am asking a very elementary question. I recently won $3000 on a free online football contest. I am assuming this is taxable income, but do most people actually declare this as income??? I previously received a payout from this site and the turnaround time was pretty fast. Even though this is an offshore site, the check came via a U.S. bank. I don't understand how this works. If I understand correctly, a person can write off their losses up to the amount of any winnings they may receive. Are offshore payouts closely followed by the IRS? Just curious...
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I doubt anyone will pay attention to this in the slightest.Comment -
Most people don't declare that. If you do not, you are breaking the law. If you routinely do this, or fail to report 50k+ in 1 year, you face a risk of getting prosecuted for tax fraud.
My advice to you - pay your taxes. If you don't though, and this is the only time you have won, you're not likely to get brutalized (or prosecuted).
One other point - you can write off gambling losses against that win in most states.Comment -
Report it...........and keep a diary and write it off with other losses.
VERY EASYComment -
Absolutely you can write off losses if you claim winnings but my advice is to not list it as offshore gambling because it is illegal. List it is greyhound track losses or horse track losses.Comment -
put "gambling" on your tax form but do not lie by putting "greyhound track win/losses" because the IRS will ask you for documentation of those losses/wins and then how would you prove that it came from greyhound track losses?
Remember that the U.S. government doesn't prosecute individuals who bet using offshore websites. The government only prosecutes individuals who bet and don't pay their taxes. Regarding solely the act of gambling, the US government does prosecute bookies and bookmakers who take bets from many other people. But agian, they don't go after individuals unless that individual is not paying taxes.
After killing somebody, not paying your taxes on any income/prize/gift is probably the worst crime you can commit in the U.S.Comment -
in greece its really different noone would pay taxes for betting winnings...here it is also illegal gambling in internet we should play only in or govemerments service named opap its redicoulus however 30% play in internet and noone pay taxes for the bettings....Comment -
while we are on topic here.... i tired this post in the players talk and no one responded maybe i will have better luck here
I live in the U.S. Does anyone know if its possible to start a corporation whose sole purpose is to place sports wagers. I understand how gambling winnings work and how you can only deduct your losses to the extent of winnings, but what i want to know is can you start a corporation whose sole purpose would be to place bets so that the operating income would be your winnings.Comment -
Dodge, place your own bets or place bets for people? If you are placing bets for other people then I am pretty sure you cannot do that because you are acting as a bookie or agent if you will. However, placing your own bets as a corporation is an intriguing question. Anyone?Comment -
Placing my own bets. What I am getting at here is I would be able to deduct travel and other misc expenses while on my vegas trips!Comment -
Yep. These guys have it. The Tax Code is not an independent enforcement regime (for other laws) and declaring offshore winnings alone will not raise the ire of the FBI or other enforcement agency. As for offsetting winnings with losses the basics have been covered but if you are audited they will require substantial documentation (i.e. the losing bet slips or account statements from offshore).Comment -
I appreciate the answers guys. I know I can deduct them but exactly where is the question. I don't want to put them on Schedule C (likelihood of audit is to high). If at all possible I would love to keep my gambling winnings and expenses completely separate from my personal return.Comment -
also some advice for the people out there that are thinking about not reporting their gambling income... not reporting income can get you in serious trouble, think fraud. over reporting expenses(losses) is nowhere near the punishment. because you can always say you made a calculation error or lost the losing slips and the worst that would happen is you have to pay the tax. if you dont report income you can get hit with all sorts of penalties for non reporting.Comment -
Yes. You can operate it as a C Corp or an S Corp. It's not worth the hassle unless you're netting at least 50k a year. There are a lot of tax advantages to it.
It won't be called a "gambling corporation" though - probably listed as a consultant company. I advise sportsbooks by betting their weak numbers
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