It's tax time!

[oddswiz]

http://www.bettorsworld.com/web/oddswiz/page4.shtml

[brink]

This is a serious question. Do you think you could write off losses if you had an account at two sportsbooks that closed up and took your money with them?

My guess is no, because how could you prove what you had there, but what do you guys think? Any chance?

[Blowfish]

Most likely not. Like that article had said, you can only deduct your losses up to your wins. The IRS doesn't care if the establishment went out of business. I think the principles would be the same.

[sportshobby]

I don't think that article covers all the bases. I have consulted a couple of accountants and attorneys on the subject, who have advised that if a player wants to establish his play as a "business" then it could be acceptable to write off more losses than wins. In all cases it was advised that this could be a difficult argument that might not win, but nevertheless worth considering.

This would mean setting up a Schedule C business form, as opposed to reporting "gambling" wins and losses.

[brink]

Interesting. So start a company and show the company income but don't mention gambling, right?

[Blowfish]

You could do that. However, if you are selected in the audit lottery or anyone at the IRS happens to think something is fishy on the return, you have to have some sort of paperwork to prove your numbers on the return. If you fraudulently create some, you're in trouble. If you falsely report the purpose of your business you are in trouble. And if you do put gambling you are no doubt raising a red flag. It is doable, but risky.