Tuesday, January 1, 2008

7-7-7 You're a Winner! And a Loser

Ka-Ching... ker plop

Californians are the biggest liars in Las Vegas. Years ago when I first arrived in Las Vegas as a young, struggling schoolteacher I took a second job as a taxi driver and later as my wardrobe improved, a limousine driver. Whenever people would get into my cab or limo I'd always chat with them - "Where are you from? How are the casinos treating you?" etc. Most fares were from California. That is not a surprise as more than half of the visitors to the Valley of the Dollars come from San Andreas by the Sea. What surprised me most is that they would nearly always answer, "I broke even."

I'm here to tell you that if every visitor to a casino broke even, Las Vegas would still be more desert and gulches than concrete and neon. Of course, SOMEBODY has to win a jackpot occasionally. That's one of the things that keeps visitors returning to our oasis. With that in mind, the favorite of all government agencies, the IRS reminds us this time of year to read their Bulletin 419, "Gambling Income and Expenses."

A CPA friend of mine tells me that ALL income is taxable, even the change that you pick up in the parking lot because your kid is too lazy to bend over. Your kid might be lazy but he might not be so stupid since he will not have to declare the parking lot change as income. Although the casual gambler rarely reports casino or track or even internet gaming winnings, the IRS requires it. Three sevens might turn out to be lemons. Be careful how loudly you yell, "Bingo!"

The IRS allows you to deduct losses as long as those deductions don't exceed your winnings. And they want you to keep a log if you plan to deduct. No, not those tallys that casinos provide you. You know, the ones that have disclaimers printed on them? Nope, Uncle Sam wants YOU to keep detailed logs of how often, how much, when and where. Kind of takes the fun out of impulse gambling, but the more information you can provide the better your chances you'll be believed when the tax man cometh.

Want to be a professional gambler? That doesn't mean you place a bet on the Raiders for your brother-in-law. The IRS has recently established a designation of "professional gambler" for those whose frequent gambling activity serves as their primary source of income. The pros get to deduct related expenses such as hotel stays, car rentals, etc. But most gamblers are simply weekend warriors or day trippers upon whom Lady Luck occasionally smiles. If you fall into that category, the IRS wants you to share that information. And when your auditor asks you how you did at the tables, don't say you broke even. He'll know you're lying even of you're not from California.

A little blogging music Maestro... How about The Gambler, Luck Be A Lady, or even Camptown Races?

Dr. Forgot

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