--- In vpFREE@yahoogroups.
>
> <<A third benefit is
> that there is some ability (being reduced all the time, but
still..)
> to carry losses forward, which a 1040 filer cannot do at all.>>
>
> I think that this is not correct. Schedule C filers normally may
carry
> forward their losses. But IRC 165 (d) takes precedence in how
you treat
> gambling losses.
IRC 165 (d) only applies to offsetting GAMBLING losses: let's take
the following example:
Joe Gambler has a net gaming win of $28,000 for the year. BUT---his
expenses associated with that income are $23,000 (travel, lodging,
all the normal expenses you associate with a business). So, if he
files a Schedule C, his taxable income from gambling is $5000; it's
$28,000 if he files Form 1040 alone.
As in any other business, Joe has to pay self-employment tax on net
income. This is 15.3 percent. The advantage of the C filing,
however, offsets that, in that just about all reasonable expenses
are now deductible from gambling net income--including the vehicle
expense to get to the casino, cost of tax and other record keeping,
meals while on the job, even that cushion you bought to sit on while
at the machine.
www.professionalgam
creating a separate entity (S corporation, for example) that all
your gambling activity can be filtered through.
So, a loss generated from simply getting creamed at the machines is
can NOT be carried forward--but a net loss reported on Schedule C
that is caused by expenses more than offsetting net income IS.
What's interesting (if that's the word) is that none of this is
really nailed down, even in the eyes of the IRS. There's a
surprising amount of subjectivity in the interpretation of the laws.
What's worked for me--following the advice of several professionals-
is diligent record-keeping, and an aggressive stance as far as my
filing status and right to deduct legitimate expenses. The IRS bear
bluff-charges a lot; if you don't back down, quite often, they back
off.
Earn your degree in as few as 2 years - Advance your career with an AS, BS, MS degree - College-Finder.net.
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