PartyPoker and Reporting Winnings Accurately to the IRS
Moderators: ihatejacks, Section Moderators, Moderators
16 posts • Page 1 of 2 • 1, 2
PartyPoker and Reporting Winnings Accurately to the IRS
by royalcrap » Mon Apr 09, 2007 3:39 am
Hi all,
I think I figured out how to report my poker winnings accurately to the IRS. I know my PokerTracker/TourneyManager stats are not totally accurate, so I sent PartyPoker an email asking for my complete history of deposits and withdrawals. They responded within a day, saying it would take 24-48 hours for them to pull my records from their archives. In less than 48 hours, they sent me exactly what I wanted. Now between last year and this year, I can rest assured that I have reported every cent I've ever made in poker winnings. The bad news is I owe over $10K in taxes this year!
By the way, this confirms what I always suspected--PartyPoker does in fact have the capability of determining exactly how much an individual player has won or lost. And, upon request (by a player at least), they can pull that information from their database in less than 48 hours.
The IRS would have a field day with this information; remember PartyPoker is friendly toward U.S. policies!
Interesting... if deposits and withdrawals told the whole story, it would look like I was a break even player for a full year before I started winning. The truth is I did have some minimal winnings, which I just kept in my account for about a year.
RC
I think I figured out how to report my poker winnings accurately to the IRS. I know my PokerTracker/TourneyManager stats are not totally accurate, so I sent PartyPoker an email asking for my complete history of deposits and withdrawals. They responded within a day, saying it would take 24-48 hours for them to pull my records from their archives. In less than 48 hours, they sent me exactly what I wanted. Now between last year and this year, I can rest assured that I have reported every cent I've ever made in poker winnings. The bad news is I owe over $10K in taxes this year!
By the way, this confirms what I always suspected--PartyPoker does in fact have the capability of determining exactly how much an individual player has won or lost. And, upon request (by a player at least), they can pull that information from their database in less than 48 hours.
The IRS would have a field day with this information; remember PartyPoker is friendly toward U.S. policies!
Interesting... if deposits and withdrawals told the whole story, it would look like I was a break even player for a full year before I started winning. The truth is I did have some minimal winnings, which I just kept in my account for about a year.
RC
- royalcrap
- Grinder
- Posts: 197
- Joined: Mon Dec 05, 2005 3:29 am
Re: PartyPoker and Reporting Winnings Accurately to the IRS
by panhandle88 » Mon Apr 09, 2007 9:53 am
[quote="RoyalCrap"]
The IRS would have a field day with this information; remember PartyPoker is friendly toward U.S. policies!
RC[/quote]
Is that why they banned us all?
The IRS would have a field day with this information; remember PartyPoker is friendly toward U.S. policies!
RC[/quote]
Is that why they banned us all?
-
panhandle88 - School Fish
- Posts: 124
- Joined: Thu Jan 19, 2006 11:35 am
by darinvg » Mon Apr 09, 2007 10:22 am
So when you did your tax did you just put down your total net profit? I have to do my taxes tonight and my tax guy said I should be able to just report total profit but some people say you have to put down TOTAL wins and deduct total loses. I don't have this info. I just know how much I cashed out.
-
darinvg - Whale Hunter
- Posts: 1153
- Joined: Tue Nov 22, 2005 2:46 pm
by royalcrap » Mon Apr 09, 2007 10:53 am
darinvg wrote:So when you did your tax did you just put down your total net profit? I have to do my taxes tonight and my tax guy said I should be able to just report total profit but some people say you have to put down TOTAL wins and deduct total loses. I don't have this info. I just know how much I cashed out.
Yeah, that's the tricky part. I don't have that information either. I decided to simply report all of my profits and hope that is sufficient. I'm probably wrong, but I don't understand how the other method could possibly apply to guys like us who play thousands of low-limit online tournaments per year and never receive a W-2G form; reporting that way would lead to a very bizarre tax return!
RC
- royalcrap
- Grinder
- Posts: 197
- Joined: Mon Dec 05, 2005 3:29 am
by darinvg » Mon Apr 09, 2007 12:05 pm
I'm not excited to see my bill tonight either. My 2007 tax I will have a spreadsheet w/ all of my sessions (tourneymanager) but 2006 I have excel spreadsheets everywhere so it would be really tough figuring out all of my sessions. Like you say, as long as my total profit is the same they shouldn't get too pissed.
-
darinvg - Whale Hunter
- Posts: 1153
- Joined: Tue Nov 22, 2005 2:46 pm
by royalcrap » Mon Apr 09, 2007 3:25 pm
One other thing: I read somewhere that calculating total profits is the correct method for someone who is a professional poker player. However, to claim that you are a professional poker player, there is some standard you must meet--something like the majority of your income must come from playing poker.
RC
RC
- royalcrap
- Grinder
- Posts: 197
- Joined: Mon Dec 05, 2005 3:29 am
- LadyWrestler
by royalcrap » Mon Apr 09, 2007 4:14 pm
Here's why I don't understand the log-book method: what do I report as income and what do I deduct as losses?
Scenario 1: I played in just one $30+3 tournament in 2006 and I took first place for $150.
First, I won $150, but I actually made a profit of just $117. Do I really have to report winnings of $150?
Second, $3 of my $33 buyin was not "gambled," was it? That was just my entry fee into the tournament. I only gambled with $30, right? Do I deduct $33 or $30?
Scenario 2: I played in 5,000 $30+3 tournaments in 2006. I won 14%, took second in 12%, and took third in 12%.
Now the problem is magnified by 5,000.
First, under method 1, I won $195K (5K x .14 x $150 + 5K x .12 x ($90 + $60)); under method 2, I won $132.3K (5K x .14 x $117 + 5K x .12 x ($57 + $27).
Second, depending on whether the entry fees count as gambling losses, under method 1, I lost either $150K (5K x $30) or $165K (5K x $33); under method 2, I lost either $93K (5K x .62 x $30) or $102.3K (5K x .62 x $33).
In the worst-case scenario, I owe taxes on $45K ($195K-$150K). In the best-case scenario, I owe taxes on $30K ($195K-$165K).
I guess my question boils down to whether the entry-fee is deductible.
RC
Scenario 1: I played in just one $30+3 tournament in 2006 and I took first place for $150.
First, I won $150, but I actually made a profit of just $117. Do I really have to report winnings of $150?
Second, $3 of my $33 buyin was not "gambled," was it? That was just my entry fee into the tournament. I only gambled with $30, right? Do I deduct $33 or $30?
Scenario 2: I played in 5,000 $30+3 tournaments in 2006. I won 14%, took second in 12%, and took third in 12%.
Now the problem is magnified by 5,000.
First, under method 1, I won $195K (5K x .14 x $150 + 5K x .12 x ($90 + $60)); under method 2, I won $132.3K (5K x .14 x $117 + 5K x .12 x ($57 + $27).
Second, depending on whether the entry fees count as gambling losses, under method 1, I lost either $150K (5K x $30) or $165K (5K x $33); under method 2, I lost either $93K (5K x .62 x $30) or $102.3K (5K x .62 x $33).
In the worst-case scenario, I owe taxes on $45K ($195K-$150K). In the best-case scenario, I owe taxes on $30K ($195K-$165K).
I guess my question boils down to whether the entry-fee is deductible.
RC
Last edited by royalcrap on Mon Apr 09, 2007 4:26 pm, edited 1 time in total.
- royalcrap
- Grinder
- Posts: 197
- Joined: Mon Dec 05, 2005 3:29 am
.
16 posts • Page 1 of 2 • 1, 2
Who is online
Users browsing this forum: No registered users and 3 guests
