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Rep. Titus says IRS should raise jackpot threshold

Discussion in 'Casino Gaming' started by Sonya, May 11, 2017.

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  1. Sonya

    Sonya Queen of VMB

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  2. makikiboy

    makikiboy VIP Whale

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    Actually I read somewhere that the IRS wants to lower the threshold. Guess they want to make sure they get their pound of flesh and realize that the $1199 in winnings add up to a lot of tax money they could be getting.

    Many machines are set so you win only $1199 on the jackpots so you don't have to claim them in taxes.

    I wouldn't mind the threshold going up but I seriously doubt they would do that. Think of all the tax money they will lose out on. If anything I wouldn't be surprised if they lower the threshold down to $1000 or $800 just to get more money off the gamblers.

    I know, I know, bite my tongue on that.
     
  3. woodsie

    woodsie VIP Whale

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    It's a good start but negative expected return games shouldn't be taxed in the first place. The IRS's cut should be based only on the income of the house vis-a-vis corporate taxes as that is where the actual value is being created.

    Player side gambling wins should only be taxable if gambling loses are deductable without limit. If it has to go any way then it should go both ways.
     
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  4. CMUCPA14

    CMUCPA14 Low-Roller

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    Like most things regarding taxes, the federal government only wants to implement policies that are favorable to them. The idea of gambling losses that exceed wins being deductible will never happen.
     
  5. remmerde

    remmerde VMB's Resident Cigar Sommelier

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    Strongly agree.

    Or at least a carry-forward of losses to offset future wins. The scenario of some high roller losing $1 at the baccarat tables on December 31, followed by a $1 million win on New Year's Day means the IRS considers them to have netted $1 million and taxes that full amount.
     
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  6. Sonya

    Sonya Queen of VMB

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    There was talk in the last year or so about lowering it to $600. They got some pushback from gamblers and industry people.

    There have been many discussions here about how it should be raised. Thought you all would want to see the article.
     
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  7. tmoney25

    tmoney25 High-Roller

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    It should be raised to... $1,000,000,000,000!!!!!!!
     
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  8. Chuck2009x

    Chuck2009x VIP Whale

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    You're allowed to carry investment losses forward because, well, they're investment losses.

    The fairest solution would be to only tax net winnings in a tax year, but that will never happen because the casinos would have to track table play accurately and they wouldn't want to have to do that.

    I'd love to see it, but I don't think you'll ever see them raise the W-2g threshhold, it's just money out the window. if they ever did it, they would get it back some other way, like eliminating the loss deduction entirely.

    If they raised the threshold to $2,000, that would eliminate 8 of the 10 W2-Gs I've gotten lifetime. But I've been able to offset every penny of all of them. If they raised it to $2,000 but there was no deduction, I woulda had to pay taxes on $15,600, the total amount of the two wins I've had that were greater than $2,000.
     
  9. DrLect

    DrLect Winning!

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    Obviously, the $1200 should be indexed to the cost of living. Using a a factor of COL of 3% increase since 1977, jackpots up to $4031.88 should not be taxable in 2017. If losses are reported to offset wins, the IRS should scrutinize the taxpayers' documentation to prevent fraudulent reporting and assign the appropriate penalties for those who have inadequate records. I have always been concerned about how I would be able to offset the W2-G that resulted from a big win. Sadly, I've never had the problem.
     
  10. vegasqc

    vegasqc VIP Whale

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    Id be more than happy if they just upped it to 2499$
     
  11. vegasdev

    vegasdev VIP Whale

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    it should have been raised years ago. of course I have a lot of ideas about what the IRS should do.
     
  12. vegasdev

    vegasdev VIP Whale

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    I don't see too many of those $1199 machines anymore. where do you find them?
     
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  13. flyguyfl

    flyguyfl VIP Whale

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    I agree.
     
  14. notfromconcentrate

    notfromconcentrate Connoisseur of dive casinos and obnoxious outfits

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    From a strategy point of view, consider the IRS's primary incentive. It's to collect as much tax $ as possible. Presumably, the $1,200 threshold was set in 1977 because it's high enough to avoid the mountain of paperwork that would come from taxing every single jackpot of a lower value, but low enough to get their hands on a sizeable enough amount of winnings to bring in revenue.

    The disincentive to raising the threshold is that even more jackpots will go unreported, thus reducing tax revenue. The disincentive to lowering the threshold is that they'll have more paperwork to do, and they'll piss off a lot of gamblers who win $800 jackpots and will end up having to pay tax on it.

    Realistically, there's enough research available to show that people will continue to gamble, irrespective of disincentives of any kind. Whether that's 6:5 blackjack, slot machines with 20%+ holds, or triple-zero roulette wheels, the action will carry on.

    Having said that, say they lower the threshold to $600. A lot of gamblers will, indeed, get pissed off that what were once common jackpots that they didn't need a W2G for, are now subject to tax/withholding. But we all know very well that such limitations, in whatever form they may take, will not dissuade the majority of gamblers.

    Nothing goes down on the gaming floor that the casino doesn't know about. And if the casino can know about it, so can the IRS. They're not around to please gamblers, they're around to collect money for Uncle Sam. If their calculations say that a certain new threshold is worth their time, then that will be the basis of change, not making things fairer for us players.
     
  15. C0usineddie

    C0usineddie VIP Whale

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    If that law was put in place in 1977 does that mean that the average payout has not increased much since then? i mean, people still tip $1 for a drink like they did then, just sayin.
     
  16. nostresshere

    nostresshere Mr. Anti Debit Card

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    It really needs to be changed.

    1) Nobody wins. It is not a win in most cases. We just keep playing and walk away with a loss for the night. Why is it income?

    2) If you ran a busines and took in $50,000 but spent $60,000 to say open, you do not report it as income.

    3) That W-2 counts as income towards determining ACA income.

    4) That W-2 counts as income towards medicare expenses.

    It is wrong.Totally wrong.

    Please fix it.
     
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  17. Grant1982

    Grant1982 High-Roller

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    It's absurd... absolutely absurd. In the 70s when they decided $1200 I highly doubt there was as many folks playing higher denomination slots as there are now. Obviously higher denomination slots will reach this threshold much easier. What's more is I am willing to bet the IRS spends more money on resources trying to check on people writing off the losses than they actually make off of it. At the end of the day the casino is not compelled to provide a statement to the IRS for an individual (I think) so as long as your gambling log is legit I do not think the IRS has a leg to stand on when auditing you.
     
  18. makikiboy

    makikiboy VIP Whale

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    They are around if you look for them. Just look for the payouts, some of them are set so you don't have to file a w-2 because it is under the $1200 limit.
     
  19. remmerde

    remmerde VMB's Resident Cigar Sommelier

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    Forgive me for being pedantic here, but this is important to clarify.

    The special treatment on investment losses is not that they are carried forward. That is absolutely necessary and sensible for any multi-year venture, as almost all businesses are. Many reductions of income get carry forward provisions. And in fact, some are even forced on taxpayers where they actually benefit the IRS rather than the taxpayer (capital depreciation).

    The special treatment that investment losses get is that they can offset regular income. No gambling losses get such treatment. Nor should they.

    However, it's a doubly punitive situation for the IRS to tax someone on a large win they get within a single year, with no consideration to the fact that the individual may not have had any actual net gain from that activity when crossing calendar years. I understand the arguments for it, but other countries (Canada for example) have come to the opposite conclusion and don't tax any gambling wins at the individual level because the losses are not deductible.
     
  20. Multifarious5

    Multifarious5 VIP Whale

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    While I'd love it if it happened, no one except a Nevada rep has much reason to push this. On VMB we feel like the majority for loving gambling, but we all know we're not. Ergo, why we all flock to a site with a similar mindset, we're not the norm ;)
     
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