I don't recall seeing much of what Schedule C-filing professional gamblers do or experience, but I'll explain what I saw.
Because I also wrote and trained others here and at times around the country for about 11 years, most of my expenses having ANYTHING to do with any of that, were claimed--and it made a huge difference. I also went thru three IRS audits during that time, and every penny I deducted was reviewed & allowed.
The key is in being precise, realistic, and having meticulous record keeping as well as being nice to the auditor(s) throughout the process. There is really no need for anxiety, worry, or loss of sleep if you do things right.
----- Reply message -----
From: TedChee@aol.com
To: <vpFREE@yahoogroups.com>
Subject: [vpFREE] Re: Tax Consequences was FSP strategy ideas
Date: Thu, Jan 26, 2012 2:32 am
When I scan the digests, I see a lot of things put out there without the
proper warnings such as playing for the highest % return without regard to
the variance of the game will do to your bankroll. Using Schedule C is one
of those items that should have a warning label when applied to gambling.
I filed Schedule C for a consulting business which ran concurrently with my
gambling for about 10 years but I never included any gambling expenses on
a Schedule C even though I was well aware of what I could deduct. Even
though I had years where I had a level of activity which probably exceeded the
throughput of some pros and I'm sure I could have passed the material
participation tests for those years, I never claimed expenses under Schedule C.
When I started gambling in 1994, a goal was to quit when it turned south so
I was never sure how long or how active I would be. I was also unsure of
meeting the material participation tests over time (3 years & 10 years)
since you don't know if you're going to have periods of relative inactivity.
(Looking back, I could have met the tests.) However, if I only filed Schedule
C only when I needed the deductions that would set off red flags which I
didn't want.
For part-timers, filing Sched C as a professional is a course that ought to
considered carefully especially if you have another source of income that
involves a significant amount of your time. Early in my career I had the
good fortune of working for several corporations which empasized the goal --
GET A GOOD NIGHT'S SLEEP. I've never regretted the extra taxes I've paid.
In a message dated 1/25/2012 7:31:46 A.M. Pacific Standard Time,
vpFREE@yahoogroups.com writes:
_Re: Tax Consequences was FSP strategy ideas _
(http://groups.yahoo.com/group/vpFREE/message/119052;_ylc=X3oDMTJzazFtZHNiBF9TAzk3MzU5NzE1BGdycElkAzQ2NDE
wMTcEZ3Jwc3BJZAMxNzA1MDY1NzMyBG1zZ0lkAzExOTA1MgRzZWMDZG1zZwRzbGsDdm1zZwRzdGl
tZQMxMzI3NTA1NTAw)
Posted by: "kcace1024" _cy4873@hotmail.com _
(mailto:cy4873@hotmail.com?Subject= Re:%20Tax%20Consequences%20was%20FSP%20strategy%20ideas) _kcace1024 _
(http://profiles.yahoo.com/kcace1024)
Tue Jan 24, 2012 8:48 pm (PST)
I find it a little strange that Rob Singer has no idea of the tax
consequences of W-2s. Of course, you can avoid the AGI problem if you file a Sched
C as a professional gambler, but this is not allowed by the IRS for
everyone who plays negative games and even for most APs.
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