Every serious player has a logbook in order to keep track of his/her wins and losses. This log will become your main tool when preparing to file for an income tax return from the Internal Revenue Service (IRS). Gone are the days when you could simply declare an equal amount of losses and gains and receive a return of withheld taxes. Nowadays your claim must sustain a thorough verification. This verifications always starts, and often ends, with the examination of your log of wins and losses from the claimer.
Yet, how does one go about creating such a log that will satisfy the most inquiring IRS agent? First, you must insert the date and time, the location, and the game(s) played. Location may be a casino, racino, horse track, a public place or a private home. However online casinos do not qualify, even if you played from the United States, which is practically impossible nowadays.
It’s also important to record the exact amount won/lost and the game played. It’s important to remember, as we told you in previous articles, that all games are not subject to an automatic taxation. However I would suggest you enter all the games played in your log and to sort them out only at the end of the year. Your log might then be used to determine what activities you might let go or which you might spend more time playing.
In order for your log to hold up well, we suggest inserting, whenever possible, the names of playing partners, especially if you often play against the same opponents. It’s possible that your opponents have the same information as you in their own log, if they won or lost large amounts against you. Obviously your best chances are when the same results figure in different logs.
Aside from your gaming log, other elements will help support your claim to the IRS. First, a good money trail can be very useful. For example, it would be easier to claim a loss of 50 000$ at a Bellagio table if you transferred by wire such an amount before traveling there to the casino cage. You should also keep any receipt of automatic withdrawals or of cage withdraws.
In the same frame of mind, it’s essential to keep your tournaments entry receipts as well as your sports betting or horse track bets.
Finally, I cannot stress enough the importance of good log keeping. Nowadays, with smart phones, it’s easier than ever to keep a good log. A loss in January might be quite useful to offset a big win in November, as long as you remember it…
Gains, losses and expenses
As in anything else, there is no absolute answer. The famous” it depends” rules here also. No two situations are alike. Still, some basic principles never change. The first one: all your losses must be registered and kept in a file. Obviously, telling the IRS that you lost x$ is not enough!
Let’s start by separating the two kinds of players: the regulars and the leisure players. In the leisure group, we will find the winners of jackpots via a unique event. For example anyone winning 100 000$ in a slot machine doesn’t expect to win the same the next day. On the other side, a solid poker player who wins a tournament today still expects to win the next day! He might be a regular.
The regular thus must keep an annual register at all times. This register will include every detail of his whereabouts. Lets follow Paul for instance: in January, Paul decides to take part in a few poker tournaments in Los Angeles. He keeps a record of each of his expenses, even those who probably won’t be accepted by the IRS right now. He keeps track of plane tickets, hotels, meals and transportation( rental cars, taxis, limos, bus).
Not being a pro, Paul will not be able to present these as expenses. On the other hand, if Paul gets very successful, he might eventually decide to turn pro in the USA and will benefit from having kept his receipts.
Paul will also have to keep a detailed account of all of his playing sessions, no matter what game he played. Paul will then write in his log that on January 12th he played a poker tournament at the Commerce Casino, in which the buy in was 1 000$. he finished second in the tournament and won 31 000$. The casino gave him 22 000$, representing 30 000$ net, minus 30% of 30 000$, 9 000$. It is good to understand that the entry fee has already been deducted from the net purse.
The next day, Paul, after having celebrated his second place finish, decides to play some blackjack and goes on to lose 6 000$. His log for these 2 days will read, a win of 30 000$ in tournament X at the Commerce Casino on the 12th and a loss of 6 000$ at the Bicycle casino the next day, playing blackjack from 9 to 11.
When Paul goes to Las Vegas in March, he goes on filling his log. He keeps a record of every session, winning or losing, including where and when he played. Having done this all year, Paul has put himself in the best position (the only one as a matter of fact) to reclaim his dues from the IRS.
The log is the worst part of being a regular player. Nonetheless it remains essential and allows the player to face the IRS holding the right cards. The log also proves the seriousness of a player and usually sets him well when he reclaims the dollars he is eligible to get.
It’s quite the same for an occasional player. Peter for example went to Atlantic City during his vacations. He won 50 000$, winning the jackpot at Caribbean Stud Poker. It is safe to assume he will keep on playing and, knowing the odds of this game, that he will lose part of his winnings. He should consequently use a log also. In his case though, no need to keep a record of lodging, transport and meals, of course! He certainly won’t need them.
As a whole, each case is different and having specialists treating your claim is always the best solution. Knowing that a professional team like Gamblingtaxes.ca is taking care of you and counseling you as well as preparing your documents represents the best bet in a domain that few know and understand well.
