I discuss the "session reporting" issue at length in the new edition of Tax Help for Gamblers (which will be available as an eBook by the end of January). I cite court cases that support the "session" method but warn about the problems and dangers of using a win figure less than your W-2G total. Personally we use our W-2G total and then "make up" a loss figure that gives the same actual win total that our diary shows. If we ever get audited, I figure – hope? - we can show our detailed diary and justify our actual win total. However, some people can't do this because of 1040 Line 21 problems: a state income tax that doesn't allow gambling losses, they can't file as a professional gambler so a high AGI causes umpteen penalty issues, yadda dadda.
The problem with a tax discussion here on this forum, especially about how to count free play, is people are giving OPINIONS. This can be misleading and dangerous. The IRS has never addressed the subject of free play. So however you treat this it becomes a personal matter. In the book we talk about several ways people handle this on their returns, but we never say how you SHOULD do it – we can't because the IRS has NOT addressed it and there have been no court cases about it. No matter how much education and financial experience you have, remember that when you talk about tax issues, so much depends on PERSONAL facts and circumstances. And just because one explanation of an issue seems "logical" – remember the government, and especially the IRS, has never been accused of being logical!!!!
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Jean $¢ott, Frugal Gambler
http://queenofcomps.com/
You can read my blog at
http://jscott.lvablog.com/
[Non-text portions of this message have been removed]
Posted by: "Queen of Comps" <queenofcomps@cox.net>
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