New Federal Tax Structure. Only 90% Of Losses Is Tax Deductible.
BLUEJAYWAY
Posts: 11,602 ✭✭✭✭✭
in Sports Talk
Example: Bet $1000.00 win $500. Losses of $500. Allowable deduction 90% of $500=$450. Taxable amount is $50. Think I have this right.
There are legislators trying to repeal this and make it retroactive to 1/1/2026. This law includes sports wagering as well.
Successful transactions:Tookybandit. "Everyone is equal, some are more equal than others".
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I absolutely HATE this whole thing.
Pasted from AI:
At first glance, correct me if I'm wrong, you're gonna get taxed at least on 10% of your gambling winnings, no matter how much you lose gambling.
If that is correct, this is one of the sickest things I've ever seen in the tax code, if not the sickest.
At first thought, I don't see how this is sustainable for most high stakes gamblers. Particularly nose bleed poker players. For example, they can win and lose tens of millions of dollars per year. Let's say ya win 10 mil and lose 10 mil. But instead of breaking even for the year, you're now stuck with a tax bill on 1 million dollars of taxable income. I think the highest tax rate is 28%. So suddenly you now owe the IRS a whopping $280,000 dollars?
Again, correct me if I'm wrong on this.
@stevek
you're not missing anything
Erik Seidel said it's forcing him into retirement
Wow, that's a shocker, but not surprising.
Ralph goes into a panic when he gets a letter from the Internal Revenue Service ordering that he appear at their office the next morning, fearing that the IRS is investigating him for income tax evasion.
Ralph’s tax deductions include:
Uniform cleaning costs
Union dues
Driver’s license fees
$80 spent taking Freddy Muller out to eat—if he became traffic manager
Norton’s deductions include:
Vulcanizing his rubber boots
Waterproofing his lunchbox
Twenty-five percent of his rent, which he claims is used for business purposes
Bankbook entry:
Balance: $75.00
Interest: $2.45
Unreported income and items Ralph forgot to declare:
One skinny chicken, valued at $2.00
$25.00 won playing pool
A high pinball score at Sal’s Pizzeria, earning a horse-shaped clock
$5.00 for winning a three-legged race at the Raccoon Picnic
$85.00 from an all-night poker game
$3.00 Norton found floating in the sewer
highest income bracket rate is 37%, but you're only taxed on the amount of dollars in the bracket. usually there's some loophole where you can setup a philanthropy and gamble for free or something under a LLC if it's held by a trust and you don't own a green car.
There have been a number of movie stars, celebrities, etc, who have gotten in trouble with the IRS over tax issues.
Perhaps the most famous was Judy Garland, yes "Dorothy", who sadly died almost dead broke and living in a dingy apartment.
It’s like the old saying goes, there’s only 3 certainties in life…..
death, taxes, and great boxing photos.
"They"want it all.
I plan to check into this further.
This may affect all sorts of other ventures. What about stock market day traders? I don't do that, but many do, and that is another tough game to beat. Now it has become virtually impossible.
There are some on this CU forum who dabble in trading gold, silver, and other commodities. Same thing, very tough to beat and this law now turns it into a near impossibility.
It may affect those who flip cards and coins for a living. The list is almost endless. Hard to believe this outrageous law won't be quickly repealed.
Don't forget bartering is taxable too.
My guess as to what's going to happen with this, if it isn't repealed, is that at say the US based gambling websites. They are now going to separately list your winning bets and losing bets, not just lumping both together into one sum.
It also means that basically you're going to have to "automatically" declare at least 10% of those gambling winnings as income, and pay taxes on it. If not, you're either going to get audited, or more likely just receive a notice from the IRS for additional tax owed.
Had a bad year at gambling? Most people do. But surprise, surprise, now you're going to get hit with declaring the "winnings" as income, and paying taxes on at least 10% of it, no matter how much you declare as losses. Try telling your landlord that you can't pay the rent due to an unexpected tax bill, and see what happens. Try telling your bank the same thing about not being able to make the car payment.
This whole thing is simply an abomination.
she did not live in a boat Vera
If it puts an end to sports gambling its worth while tho.
A true grown man needs a bookie not a smartphone
The illegal bookies are loving this, as they don't report nothing.
show some love and give them some of your cash theirs is a difficult business
the government continues to incrementally squeeze us year after year.
I wonder where the tipping point will be? when the electorate finally says "no more?"
George Brett, Roger Clemens and Tommy Brady.
Just another nail in legal sports betting / casinos for big boy bettors.
So 90% of your losses only when lost at a legal book - but 100% it’s a “contract exchange” on the same event.
Ohh - and your not limited by exchanges, paying 60% less vig and have much more liquidity to trade events.
States wanted legal gambling so bad - but never saw the federal government effective killing it so quickly by allowing these event exchanges and changing how losers are taxed.
I'd be careful with that. I would strongly guess that the IRS would likely consider the exchange betting as gambling, same as any bookie. I could be wrong.
Will this law cause a resurrection,as if they went away, of an increased use of the bookmaker?
That’s better than what coin collectors get. If you make $1,000 on one sale and lose $500 on another, you still pay on the $1,000 gain with no relief from the loss. That sucks. I don’t think that you should be able to deduct net hobby losses from your income, but there should recognition for net gains. The government should not have “You win I win, but if you lose, I still win it all.”
Sports betting kiosks at casinos if one is looking for anonymity.
Cameras are everywhere.
It's official that at least for this tax year this will be in effect since none of the proposed legislation is going to make it out of committee. Senator Mike Crapo of Idaho really proving that nominative determinism is real. 33 years as a senator, 160 bills he sponsored or co-sponsored actually became law, and about a third of those involve handing out gold medals and declaring observance days and issuing commemorative coins and renaming post offices. Over 33 years, just 11 bills he introduced himself had become law, only to wake up from his taxpayer funded nap to bite the hand that feeds. This is really kicking a whole lot of Americans in the hospitality industry in the teeth at a time when tourism is already way down. This is pretty much as close to shutting off an entire industry by fiat through one senator as it gets. Some men just want to watch the world burn.
This is a free gift to the offshore books though. I mean, I guess most people who win regularly and do so because they have noticed the (sometimes obvious) flaws in the system through which Vegas sets lines writ large are also the ones who have been banned from all of the onshore books anyway. Casinos leaned into the ban-or-bankrupt model pretty much in 2019. We pay taxes to the IRS even though they have no way to verify since I know I'm not the only one who simply doesn't really cash out crypto, which I've held continuously since 2011 (first as a joke and then somehow enabled me to quit my actual job). I'm sitting this one out because I can, but some people make their whole livelihood as advantage players and I suspect that they will simply continue at one of the many offshore establishments, even if you can only cash out 25000 a day off the platform.
I guess we still have datacenters to fall back on, although companies are over-selling LLMs and regulators are ignorant and scared so who knows how long that will last. Things are real bleak.
Famous poker star Eric Seidel stated he is done with poker due to this legislation.
you owe me a quarter
😀I knew I "heard" this somewhere before.
Older ageism. From an old college PSA TV ad years ago:"A mind is a terrible thing to waste".
I will pay you back with a betting golf tip: Read that some guy named Scottie Scheffler is tearing it up in golf.😆
Also threw in an agree.
Best rule is quit throwing your money away with bets and you will come out ahead!