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Tuesday, February 5, 2013

Pete's IRS Rant for 2013


DISCLAIMER:  This Blog is for Entertainment Purposes, Only.  The accounts contained herein may or may not be semi-fictitious or based only loosely in facts and/or events which in reality occurred or did not occur.  References to real and/or imaginary persons may or may not be accurate.  In fact, no person named Pete P. Peters may actually even exist.
 
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This weekend I'm planning to suck it up and prepare my taxes for 2012.  I use to go to H&R Block - The Tax Professionals.  The process would involve waiting around for an hour or more, only to have some jackass read questions to me from a computer program and then type my responses into the software.  It was readily apparent that I could cut-out the "tax professional" and type all by my big-boy self.  Thusly, I've done my own taxes the past 5 or 6 years (with the help of one of those on-line services).  The process involves filling in a bunch of boxes, making some educated guesses, ignoring silly notions like "first-in/first-out" when tabulating investment gains and estimating things like "wash trades."  So far, so good -- I've yet to be audited, let alone fined, disbarred or jailed.
 
However, I've got a bad feeling about this year.  I was the lucky recipient of multiple W-2G's courtesy of the casinos in 2012.  Yes, I was a big winner.  Except, of course, for all my gambling losses . . .
 
I just pulled up my Harrah's Win/Loss Statement for 2012.  It was a new record.  I mean, I'm not gonna be giving handjobs on the street corner in South East D.C. to pay the bills . . . It's still only a 4-digit number.  But the number in ($      ) was bigger than I had expected.  Also, this is the first year I can't say that I made more off the casinos than I lost in them, as, for the first time, my degenerate losses were greater than my investment gains on LVS/MPEL/MGM (I played LVS a bit too aggressively last year, and doubled down too soon after the stock retreated from it's fifty-two week high of $62 . . . only to fall back into the $30's).
 
Well, given all this, I'm sure as hell not paying taxes on my W-2G "winnings."  According to the IRS, I can deduct gambling losses to the extent of winnings.  Of course, proving up your losses may not be all that easy, depending on how much of a prick the IRS chooses to be.  The Harrah's Win/Loss Statement states, in no uncertain terms, that it is "not intended to be used for tax purposes."  Moreover, according to "Topic 419 - Gambling Income and Losses,"  of the IRS guidelines:

"The following rules apply to casual gamblers . . . 
 
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It is important to keep an accurate diary or similar record of your gambling winnings and losses. To deduct your losses, you must be able to provide receipts, tickets, statements or other records that show the amount of both your winnings and losses."
 
Um.  Yeah.  Of course.  Whenever I'm degening VP and slots whilst pounding adult beverage, I always carry with me my donk-diary, wherein I keep meticulous records of every session of Ms. Kitty, The Hangover, and Mr. Cashman (I also score baseball games and keep an accurate tally of my carb-count while slamming beers at the bar . . .). 
 
Anyway, notwithstanding potential issues of proof, I intend to claim my losses.  And I intend to support such losses with my Win/Loss Statement.  And I fully expect my auditless streak to expire.  Which, in turn, will prolly lead to a shit-storm relating to my trading records.  Which in turn will lead to more interaction with some semi-retarded government worker than I can reasonably, or should reasonably be expected to, tolerate.
 
In closing, it's my humble opinion that the 35% of my wages paid to the government every year more than satisfies any social obligation I may have to my fellow citizens.  The 35% I pay on my investments (yes, most of my trades result in short term gains/losses) is overkill.  I mean, I choose to risk my money in the market, and if I am successful, the government essentially "doubles down" and takes MORE of my money; and if I am not successful, I get to deduct $3,000 a year from whatever subsequent gains I may have?  Fuck - I mean, I'm still deducting my MGM Mirage losses from 2008!!! Yet, I don't complain.  All I ask is that I not be further hassled by the IRS in the process. 
 
 
     
 
 
 

9 comments:

  1. You're opening Pandora's box, buddy. What are you nuts? Go to a professional NOT NAMED H&R Block, but a genuine CPA tax professional who you see year in, year out. Pay the $300-500 and get things straight. For a guy in your position, that should be chump change, and you have the solace of being able to sleep easy at night. If you need a tax professional, send me an email & I'll hook you up with the lady I use. (Don't know if since you're in DC though, whether she can handle DC tax prep.)

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  2. I'll shoot you an mail. It would be a Maryland return . . . Thx.

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  3. Pete you cannot beat or fool the IRS go to a professional, like they say "you can pay me now or pay me later". Later is usually more expensive.

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  4. It would be unwise to take advice from a guy who will have 25% of his net taken from him twice a month until the day he dies to make both state and federal tax entities happy. So I won't provide any advice. But I will say good luck. Odds are if you run into any scuffle or any sort you will come out better than I did.

    Regards, Lester

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  5. Ouch! Thanks, Lester - that puts things in perspective... Have you thought about faking your death?

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  6. There's a certain blogger for whom you bought a plane ticket who seems to have completely outsmarted those IRS folks...you should get some advice from him.

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  7. Look it is simple. You know when you went to the casinos. Write up your log showing wins or losses from each trip. A CPA will not do this for you and can not help you with out the log.

    I would worry more about the wash sales.

    Not everyone at Block is an idiot. Plus you wait an hour because you do not bother to make an appointment.

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  8. Wow, someday I hope to do well enough in the poker rooms to actually have to worry about taxes on the winnings. Right now, I'm very safe! So congrats on that.

    I concur with the advice to seek a well qualified professional, you really don't want to mess with the IRS folks. I'm led to believe they don't have a very good sense of humor.

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  9. I concur with the "don't screw with the IRS over wash sales" crowd. After working in the finance industry for the past 5 years I can see the feds are much more serious about tracking wash sales than they used to be. Pay a few dollars to a CPA and let them do the hard stuff. And create a log to show your gaming losses sooner rather than later.

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