--- In vpFREE@yahoogroups.com, Misscraps <misscraps@...> wrote:
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> Another thought comes to mind as I watch the Presidential Debate -- if Romney is elected and puts some sort of cap on itemized deductions (he's mentioned $17000 and $25000 and who knows what next) to make up for cutting tax rates, this could probably include capping deductions such as gambling losses, since things like charitable deductions, mortgage interest, etc., are being mentioned.
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Misscraps,
While it is a long process from vague proposal by an unelected candidate to actual implementation as tax law, your concerns are well founded. If such a deduction cap were ever put in place, one would hope that Congress would write in an exception for gambling losses (or take the long overdue corrective action of letting people net out wins and losses on the front page of the 1040 form), but I wouldn't count on it. One would also hope that the casino industry would see the tax implications for their best players (i.e. biggest losers), and pressure Congress to fix the problem before a cap is put in place, but I wouldn't count on that happening either.
If such a cap on itemized deductions were ever actually put in place without any sort of exception for gambling losses, I believe it would kill off medium and high stakes video poker advantage play except for those players who are allowed by the IRS agents to file Schedule C. It would also kill off a fair amount of non-advantage high stakes machine play.
Of course, if you still wanted to make some money from the casinos, there's always blackjack (card counting) and live poker. You don't get W2-Gs from blackjack, and they are very rare in poker unless you play tournaments. Now that I think about it, such a tax rule might kill off tournament poker also.
BUT - you might ask - even without W2-Gs aren't you supposed to still declare your winning sessions as income and list your losses as itemized deductions? Yes. So a low cap on itemized deductions would put *all* casino players who play for any decent stakes in the uncomfortable position of either intentionally cheating on their taxes, or voluntarily ruining their savings account.
EE
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