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Online Sports Betting + Uncle Sam (California Residence)

Discussion in 'Non-Vegas Chat' started by scc31, Mar 30, 2015.

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  1. scc31

    scc31 Low-Roller

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    Hi all,

    So I got a couple questions for those who live in California and have a tendency to bet online for big sports events for the thrill of it. The site that I use is Bovada and I have never withdrew from there. What happens is generally if I win I keep playing the next season (Say I win Superbowl so and so, I will start betting on NBA until I lose it all....) and recycle the practice until I get some what depressed and stop gambling online and wait till I go to Vegas.

    ANYWHO. I have finally decided some self control is in order and withdraw from the site a certain amount. At the moment, I'm probably up $700 on March Madness bets (Starting at -$200 :peace:) but that's more then I can ask for. My question here is I've read numerous articles online and heard stories about players needing to report this winning on their tax. Even though I've probably lost a grand or maybe even 1.5k. throughout this year, I probably should have learned all about reporting it to tax before even playing..

    Long story short, if I wire the $500-1500 from my Bovada account to my bank account, do I need to report it to California/Uncle Sam?

    Thanks,
    SCC
     
  2. starlight0229

    starlight0229 Tourist

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    Technically, you should be reporting the winnings for each winning bet as income on your tax return (whether or not you transfer the cash to your bank account). You can then, if you are able to itemize, deduct your gambling losses to the extent of your winnings as an itemized deduction. This is technically true for any sort of gambling wins, whether or not a W-2G is received. As far as the treatment by California, I am not personally familiar with their rules as I have not had the pleasure of preparing a CA return with gambling winnings.
     
  3. FXT

    FXT VIP Whale

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    You're supposed to report everything. That said when I withdrew from 5dimes to the tune of a couple of grand, I didn't report it. I figure if I get audited, I have enough actual casino loss to even things out. No idea if it actually works that way but that's my justification :peace:
     
  4. scc31

    scc31 Low-Roller

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    Yeah, techincally I was told that I was suppose to report everything but at my small play at a couple hundred to a max of 1k, the government wouldn't hunt me down for a couple of bucks so it makes no point to it. If I was racking in like several thousand then they'd put me on a list to watch over.
     
  5. klawrey

    klawrey High-Roller

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    Yeah most people using off shore sites don't report on income taxes because they aren't willing to tell the IRS where it came from. Most people don't like openly telling federal agents they are involved in illegal offshore online gambling.
     
  6. 44inarow

    44inarow VIP Whale

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    Eh, even if you get audited and can't document the offsetting losses, the worst case is that you'll owe tax on the additional winnings. The IRS just wants their money unless you're actively running some sort of fraud.

    This is dangerous thinking on their part. There's a ton of case law and precedent holding that even illegal winnings are reportable and taxable, and they'd much rather you lie about where it came from and pay taxes on it, than not pay taxes on it; all you even would put on your tax return is "gambling winnings". I can also tell you that there's a pretty serious wall set up between the IRS and the DOJ to prevent abuse, but people always forget that they got Al Capone on tax evasion, after all.
     
  7. klawrey

    klawrey High-Roller

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    Don't disagree with you that it's dangerous but just sharing my experiences. The bigger gamblers I know usually withdraw via check and cash the check as opposed to depositing it so the only traceable instrument is the original check and no deposit record or anything.
     
  8. IxAccDnf

    IxAccDnf VIP Whale

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    If you are making withdrawals often or are taking out large amounts it's best not to bank wire it in to your account or deposit the check from the book.
    Some books have a debit card and pay you by depositing funds onto the debit card.
    For the original poster I wouldn't have any concerns about the one bank wire.
     
  9. Joe

    Joe VIP Whale

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    To the OP, I am not familiar with your site, but in the rare years where I do actually win a good amount, I have done wire transfers directly to my bank. The off shore site uses some innocuous name that raises no red flags. They use the same procedure when I make a credit card deposit and nobody is the wiser.
     
    Christmas
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