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An individual professional gambler's expenses relating to his trade or
business are usually fully deductible under
IRS Code
§162 as "above the line" items. Thus, unlike
recreational gambler, most of an individual professional gambler's expenses
(within reason) are deducted on Schedule C rather than as
itemized expenses on Schedule A.
The expenses
are deductible only
if they are ordinary and necessary expenses and they
are directly connected with or pertain to the trade or
business.
An expense is "ordinary" if it is customary or accepted in the taxpayer's business.
A "necessary" expense is appropriate and helpful to the business; it doesn't have to be indispensable or essential.
Adequate
records documenting your expenses should be maintained.
These expenses can include but are in no way limited to:
- tax advice
including, for example, fees paid to
ProfessionalGamblerStatus.com™
- subscriptions
to gambling magazines and newspapers
- gambler guides
and books
- seminars and ongoing education (if not merely qualifying a
recreational gambler to become a professional gambler)
-
start-up and organizational costs (paid
after 10/22/04)
- up to $5,000 maximum is
deducible in the first year
- any amount over $5,000 must
be amortized over 15 years
- this deduction is only
allowed if tax return is not filed late
- dedicated
telephone usage and long distance
- cell phone,
pager and messenger fees
- wireless gaming fees
- cable fees
- on-line
services and connection fees
- gambler tip
services & newsletters and news service fees
- gaming chat
room fees or subscriptions
- office rent
(but not if paid to yourself)
- office
supplies, postage, bank charges and wire fees
- certain club
memberships, dues and fees
- clerical and
record keeping expenses
- wages paid to your spouse, kids, or parents for their assistance
- interest expense paid:
- on loans used for
maintaining professional gambler's positions
- including, in certain
circumstances, your credit card interest
- on home mortgage debt if an
irrevocable §1.163-10T(o)(5) election is made
- this so-called "margin interest" is
generally fully deductible for active traders because it is not
subject to the regular "investment
interest" limitation on IRS form 4952
- passive investment in
separate gambler entities is subject to the §163(d)(1) limitation
(as typically shown on IRS form 4952)
update:
IRS Rev Rul 2008-12 has officially agreed with this position.
Further,
IRS Announcement 2008-65 and
IRS Rev Rul 2008-38
state that the allowable interest (typically from IRS form 4952) is
deductible on Schedule E, rather than on Schedule A as was the
previously held IRS position.
- depreciation on furniture, television, computer equipment and software
- computers & equipment 5 year
life (Rev Proc 87-56)
- office furniture & fixtures
7 year life (Rev Proc 87-56)
- it is penny wise and pound
"audit bait" foolish (or just plain ignorance) taking a deduction
using other periods such as 3 year lives (which by law is basically
limited to horses ( §168(e)(3))
- 50% bonus depreciation rule
may expire on 12/31/2004
- up to $125,000
of "§179 deduction" in 2007 ($102.,000 in 2004,
$105,000 in 2005 and $108,000 in 2006 and retroactively
modified from the original $112,000 for 2007) in lieu of
depreciation (if proper election is filed)
- computers, other equipment,
software and furniture qualify.
- automobiles and SUV's on a
car chassis with unloaded GVW of 6,000 pounds and SUV's on a truck
chassis , Trucks & Vans with a loaded GVW over 6,000 pounds may be eligible for §179 (through
10/22/2004)
- Effective 10/23/2004 SUV's
weighing 6,001 to 14,000 pounds may be eligible for §179 to a
maximum of $25,000. SUV's over 14,000 pounds or holding a
driver + 9 passengers still have the $102,000 limitation.
- Effective 1/1/2008 SUV's
weighing 6,001 to 14,000 pounds as proposed may NOT be eligible for §179.
First year depreciation would be limited to $2,960.
- $102,000 limit (as adjusted for
inflation) is scheduled to revert to $25,000 on January 1,
2006 (on 10/22/04 this provision was extended to January 1, 2008)
- to qualify for the annual
$125,000
§179 deduction you must spend less than
$500,000 in 2007 ($410,000 in 2004 and $420,000 in 2005 and $430,000 in
2006)
-
travel and
automobile expense
- auto mileage rate 2022 up to four cars at a time @ 58.5˘/mile
thru June. July to December @ 62.5˘/mile (depreciation portion is
26˘, most of the remainder is based on insurance, repairs and fuel)
- note that the medical & moving (applicable only
to active-duty military members who move pursuant to
a military order and incident to a permanent change
of station) mileage rates are 19˘/mile (based mostly
on fuel cost) thru June. July to December @
22˘/mile
- the charitable purposes mileage rate is 14˘/mile (this rate is fixed by law)
- the
military rate for airplane is $1.515 and for
motorcycle is 56.5˘/mile and 18˘/mile
MALT rate
for some other travel
- auto mileage rate 2021 up to four cars at a time @ 56˘/mile
(depreciation portion is 26˘, most of the remainder is based on
insurance, repairs and fuel)
- note that the medical & moving (applicable only
to active-duty military members who move pursuant to
a military order and incident to a permanent change
of station) mileage rates are 16˘/mile (based mostly
on fuel cost)
- the charitable purposes mileage rate is 14˘/mile (this rate is fixed by law)
- the
military rate for airplane is $1.26 and for
motorcycle is 54˘/mile and 16˘/mile
MALT rate
for some other travel
- auto mileage rate 2020 up to four cars at a time @ 57.5˘/mile (depreciation portion is 27˘, most of the remainder is based on insurance, repairs and fuel)
- note that the medical
& moving
(applicable only to active-duty military members who
move pursuant to a military order and incident to a
permanent change of station) mileage rates are 17˘/mile (based mostly on fuel cost)
- the charitable purposes mileage rate is 14˘/mile (this rate is fixed by law)
- the
military rate for airplane is $1.27 and for
motorcycle is 54.5˘/mile and 17˘/mile
MALT rate
for some other travel
- auto mileage rate 2019 up to four cars at a time @ 58.0˘/mile (depreciation portion is 26˘, most of the remainder is based on insurance, repairs and fuel)
- note that the medical
& moving
(applicable only to active-duty military members who
move pursuant to a military order and incident to a
permanent change of station) mileage rates is 14˘/mile (this rate is fixed by law)
- the
military rate for airplane is $1.26 and for
motorcycle is 55˘/mile and 20˘/mile
MALT rate
for some other travel
- auto mileage rate 2018 up to
four cars at a time @ 54.5˘/mile (depreciation portion is
25˘, most of the remainder is based on insurance, repairs and fuel)
- note that the medical&
moving (applicable only to active-duty military
members who move pursuant to a military order and
incident to a permanent change of station) mileage
rates are 18˘/mile
(based mostly on fuel cost)
- the charitable purposes
mileage rate is 14˘/mile (this rate is fixed by law)
- the military
rate for airplane is $1.21 and for motorcycle is
51.5˘/mile and 18˘/mile
MALT rate for
some other travel
- auto mileage rate 2017 up to
four cars at a time @ 53.5˘/mile (depreciation portion is
25˘, most of the remainder is based on insurance, repairs and fuel)
- note that the medical & moving mileage rates are 17˘/mile
(based mostly on fuel cost)
- the charitable purposes
mileage rate is 14˘/mile (this rate is fixed by law)
- the military
rate for airplane is $1.15 and for motorcycle is
50.5˘/mile and 17˘/mile MALT
rate for some other travel
- auto mileage rate 2016 up to
four cars at a time @ 54.0˘/mile (depreciation portion is
24˘, most of the remainder is based on insurance, repairs and fuel)
- note that the medical & moving mileage rates are 19˘/mile
(based mostly on fuel cost)
- the charitable purposes
mileage rate is 14˘/mile (this rate is fixed by law)
- the military
rate for airplane is $1.17 and for motorcycle is
51.0˘/mile and 19˘/mile MALT
rate for some other travel
- auto mileage rate 2015 up to
four cars at a time @ 57.5˘/mile (depreciation portion is
24˘, most of the remainder is based on insurance, repairs and fuel)
- note that the medical & moving mileage rates are 23˘/mile
(based mostly on fuel cost)
- the charitable purposes
mileage rate is 14˘/mile (this rate is fixed by law)
- the military
rate for airplane is $1.29 and for motorcycle is
54.5˘/mile and 23˘/mile MALT
rate for some other travel
- auto mileage rate 2014 up to
four cars at a time @ 56˘/mile (depreciation portion is
22˘)
- note that the medical & moving mileage rates are 23.5˘/mile
- the charitable purposes
mileage rate is 14˘/mile
- the military
rate for airplane is $1.31 and for motorcycle is
53.0˘/mile and 23.5˘/mile MALT
rate for some other travel
- auto mileage rate 2013 up to
four cars at a time @ 56.5˘/mile (depreciation portion is
23˘)
- note that the medical & moving mileage rates are 24˘/mile
- the charitable purposes
mileage rate is 14˘/mile
- the military
rate for airplane is $1.33 and for motorcycle is
53.5˘/mile and 24˘/mile MALT
rate for some other travel
- auto mileage rate 2012 up to
four cars at a time @ 55.5˘/mile (depreciation portion is
23˘)
- note that the medical & moving mileage rates are 23˘/mile
- the charitable purposes
mileage rate is 14˘/mile
- the military
rate for airplane is $1.31 and for motorcycle is
52.5˘/mile and 23˘/mile MALT
rate for some other travel
- auto mileage rate 2011 up to four cars at a time @ 51˘/mile thru June. July to December @ 55.5˘/mile (depreciation portion is 22˘)
- note that the medical & moving mileage rates are 19˘/mile thru June. July to December @ 23.5˘/mile
- the charitable purposes mileage rate is 14˘/mile
- the
military rate for airplane is $1.29 and for motorcycle is 48.0˘/mile and 23.5˘/mile MALT rate for some other travel
- auto mileage rate 2010 up to
four cars at a time @ 50˘/mile
(depreciation portion is 23˘)
- note that the medical &
moving mileage rates are 16.5˘/mile
- the charitable purposes
mileage rate is 14˘/mile
- the military
rate for airplane is $1.29 and for
motorcycle is 47.0˘/mile and 16.5˘/mile
MALT rate for some
other travel
- auto mileage rate 2009 up to
four cars at a time @ 55˘/mile
(depreciation portion is 21˘)
- note that the medical &
moving mileage rates are 24˘/mile
- the charitable purposes
mileage rate is 14˘/mile
- the military
rate for airplane is $1.24 and for
motorcycle is 52.0˘/mile and 24˘/mile MALT rate for some other
travel
- auto mileage rate 2008 up to
four cars at a time @ 50.5˘/mile thru Jun. Jul to Dec @ 58.5˘
(depreciation portion is 21˘)
- note that the medical &
moving mileage ractes are 19˘/mile thru Jun. Jul to Dec @ 27˘
- the charitable purposes
mileage rate is 14˘/mile
- auto mileage rate 2007 up to
four cars at a time @ 48.5˘/mile
- note that the medical &
moving mileage rates are 20˘/mile
- the charitable purposes
mileage rate is 14˘/mile
- auto mileage rate 2006 up to
four cars at a time @ 44.5˘/mile
- note that the medical &
moving mileage rates are 18˘/mile
- the charitable purposes
mileage rate is 14˘/mile, there's special rates for Katrina
- auto mileage rate 2005 up to
four cars at a time @ 40.5˘/mile thru Aug. Sept to Dec @ 48.5˘
- note that the medical &
moving mileage rates are 15˘/mile thru Aug. Sept to Dec @ 22˘
- the charitable purposes
mileage rate is 14˘/mile, after Aug 24th there's special
rates for Katrina
- auto mileage rate 2004 up to
four cars at a time @ 37.5˘/mile
- note that the medical &
moving mileage rates are 14˘/mile
- the charitable purposes
mileage rate is 14˘/mile
- auto mileage rate 2003 one
car at a time @ 36˘/mile
- note that the medical &
moving mileage rates are 12˘/mile
- the charitable purposes
mileage rate is 14˘/mile
A taxpayer may not use the business standard mileage rate for a
vehicle after using any depreciation method under the Modified
Accelerated Cost Recovery System (MACRS) or after claiming a Section
179 deduction for that vehicle. In addition, the business standard
mileage rate cannot be used for more than four vehicles used
simultaneously.
These and other requirements for a taxpayer to use a standard
mileage rate to calculate the amount of a deductible business,
moving, medical, or charitable expense are in Rev. Proc. 2010-51.
Notice 2012-72 contains the standard mileage rates, the amount a
taxpayer must use in calculating reductions to basis for
depreciation taken under the business standard mileage rate, and the
maximum standard automobile cost that a taxpayer may use in
computing the allowance under a fixed and variable rate plan
To use the standard mileage rate, you must own or lease the car
and:
- You must not operate
five or more cars at the same time, as in a fleet
operation,
- You must not have
claimed a depreciation deduction for the car using
any method other than straight-line,
- You must not have
claimed a Section 179 deduction on the car,
- You must not have
claimed the special depreciation allowance on the
car,
- You must not have
claimed actual expenses after 1997 for a car you
leased, and
- You cannot be a rural
mail carrier who received a "qualified
reimbursement."
Further, to use the standard mileage rate for a car you own, you
must choose to use it in the first year the car is available for use
in your business. Then, in later years, you can choose to use the
standard mileage rate or actual expenses.
However, for a car you lease, if you choose the standard mileage
rate, you must use the standard mileage rate method for the entire
lease period (including renewals).
To use the actual expense method, you must determine what it
actually costs to operate the car for the portion of the overall use
of the car that is business use. Include gas, oil, repairs, tires,
insurance, registration fees, licenses, and depreciation (or lease
payments) attributable to the portion of the total miles driven that
are business miles.
Other car expenses for parking fees and tolls attributable to
business use are separately deductible, whether you use the standard
mileage rate or actual expenses.
http://www.irs.gov/taxtopics/tc510.html
-
home office expenses1.
- maid service
and cleaning
- unreimbursed expenses (if business
entity's papers are properly documented)
- on-premises athletic facilities (if
your business entity is
properly designed)
- deductible retirement plans,
including the Single-Participant 401k on wages (click
here for more) (if the business is
properly designed)
- a non-deductible Roth IRA in
lieu of a regularly deductible IRA
- fully
deductible
medical & health
care expenses or even a §501(c)(9) VEBA trust (if the
plans are properly designed) - Note effective in 2006, IRS is
attacking "abusive VEBA plans" that are promoted elsewhere on the
internet.
- child care
and other §125
cafeteria plan deductions
(if the plan is properly designed)
- other fringe benefit plans
(if the plans are properly designed)
- 50% deductible
restaurant
meals had with friends who are fellow professional gamblers,
lawyers, bankers, advisors
- 50% deductible
gifts to friends
and entertainment
with people who are fellow
gamers, lawyers, bankers, advisors
- all the above
with your spouse (if business purpose is properly
documented and conducted)
- 100% deductible
§119 professional gambler's daily pizza and Chinese take-out
 meals (if
your c-corp or other entity is
properly designed)
- 100% deductible
§119 professional gambler's
monthly residence rent payments (if your c-corp is very strictly
and properly designed)
- Most start-up and early
organization expenses incurred after October 22, 2004 for an entity
are fully deductible, rather then being amortized over 60 months as
the earlier rule required.
-
Other Tax Deductions and Your Small Business
Because of this favorable "trade or business" treatment, a
professional gambler's net profits are subject to Self-Employment tax, under IRS
Code §1402 (a)(3)(A)
Taxpayers who qualify to file as Professional Gambler Status may
"elect" such classification each year by a filing an appropriate tax
return with the IRS.
A
Professional Gambler's Responsibilities
US Gambling Laws and Online Regulation?
What Is a Gambling Session?
Some other websites offering
gambler tax content. Hmm, I
wonder who's website first copied from whom?
https://andersonadvisors.com/so_you_want_to_deduct_your_gambling_losses/
https://gnjcpa.com/2013/10/so-you-want-to-deduct-your-gambling-losses/
http://www.ladamcpa.com/blog/so-you-want-to-deduct-your-gambling-losses/37648
https://www.arrowtaxes.com/blog/so-you-want-to-deduct-your-gambling-losses/37648
http://www.doud4taxes.com/37762/So-You-Want-To-Deduct-Your-Gambling-Losses/
http://www.rctaxhelp.com/37648/So-You-Want-To-Deduct-Your-Gambling-Losses/
https://henssler.com/so-you-want-to-deduct-your-gambling-losses/
http://www.lavellecpa.com/37762/So-You-Want-To-Deduct-Your-Gambling-Losses/
http://www.kurges.com/37762/So-You-Want-To-Deduct-Your-Gambling-Losses/
http://www.bkmcpas.com/37762/So-You-Want-To-Deduct-Your-Gambling-Losses/
http://www.capstrategies.com/37762/So-You-Want-To-Deduct-Your-Gambling-Losses/
https://www.whitneygoretax.com/blog/so-you-want-to-deduct-your-gambling-losses/37648
http://www.monolithetax.com/37648/So-You-Want-To-Deduct-Your-Gambling-Losses/
https://www.nexusltd.com/so-you-want-to-deduct-your-gambling-losses/
Quicken's gambler information page
1 Deduction for Business
Use of Your Home
One provision of the 1997 tax act,
which was delayed to be effective for years after 1998, greatly
relaxes the rules that must be met in order to deduct business use of
your home.
A major change is the elimination
of the rule that required the office be your "principal place of
business" - the place where you meet with customers or the
place where you generate most of your income. That is not the current
requirement.
The new rule is a simple
test requires that the use of the office be an "ordinary and
necessary" expense for the business and, unless this is the only
fixed location of the business, it must be the only place available
where you can perform the necessary "administrative or
managerial" functions of the business.
Note that this does not change the
requirement that the office must be used "totally and
exclusively" for the business, and have no other use whatsoever.
This is very strictly interpreted, and any degree of non-business use
will disqualify the office. (Theoretically, if you have your computer
in your home office, and sometimes use it to track personal
investments, surf the web, or play an occasional game that can cause you to lose
all deductions for use
of the home office for the year.)
Also, if the use of the office is
as an employee, that use must clearly be solely for your employer's
convenience, not yours. If you are provided a suitable place to work
by your employer (even if that means a 25 mile drive to the office in
the middle of the night, when you are on-call to return customer
emergency calls), that precludes you from claiming deductions for use
of your home.
Note that, if your office in home
qualifies for a deduction under the revised laws, it can be considered
a "place of business" for determining your deductible
business mileage, therefore it would not be non-deductible commuting.
The office in the home deduction generally is limited to an amount not
to exceed your trading profits less your trading expenses. The excess
office in the home deduction may be carried forward to be used in the
following year(s).
Pass-thru entity unreimbursed expenses require proper documentation
and must have no waived right for reimbursement.
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