Rules concerning income tax and gambling vary internationally.
(Redirected from Income tax and gambling losses)
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Gross Gaming Revenue (GGR) What is Gross Gaming Revenue (GGR)? GGR stands for Gross Gaming Revenue in the gaming and online casino world. It is calculated as the difference between the net profit (the amount players wager minus the amount they win) and the tax an establishment pays in regards to gaming supplies. Nonprofit organizations that conduct lawful gambling activity must file Form G1, Lawful Gambling Monthly Tax Return and schedules and pay the tax due each month. Currently there are two taxes collected: Net Receipts Tax on non-linked bingo, raffles, and paddletickets (8.5%).
United States[edit]
Licensed lawful gambling organizations pay gambling taxes and/or fees on non-linked bingo, raffles, paddletickets, electronic-linked bingo, tipboards, sports-themed tipboards, and electronic and paper pull-tabs. (See Minnesota Statutes, Chapter 297E.) The lawful gambling industry includes manufacturers of games and gaming equipment, distributors who sell games and gaming equipment,.
In the United States, gambling wins are taxable.
The Internal Revenue Code contains a specific provision regulating income-tax deductions of gambling losses. Under Section 165(d) of the Internal Revenue Code, losses from “wagering transactions” may be deducted to the extent of gains from gambling activities.[1] Essentially, in order to qualify for a deduction of losses from wagering, the taxpayer can only deduct up to the amount of gains he or she accrued from wagering. In Commissioner v. Groetzinger, the Supreme Court Justice Blackmun alludes to Section 165(d) which was a legislative attempt to close the door on suspected abuse of gambling loss deductions.[2]
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Wagering Transaction[edit]Tax Revenue From Gambling Uk Today
The Internal Revenue Service has ruled that a “wagering transaction” consists of three elements.[3] First, the transaction must involve a prize. Second, the element of chance must be present. Finally, the taxpayer must give some consideration.
Tax Revenue From Gambling Uk 2017Section 165(d) and Professional Gamblers[edit]
In Bathalter v. Commissioner, a full-time horse-race gambler had gains of $91,000 and losses of $87,000.[4] The taxpayer deducted the expenses under Section 162.[5] The service argued that Section 165(d) precluded the taxpayer from engaging in gambling as a 'trade or business.'[4] The Tax Court held that the taxpayer's gambling was a business activity and allowed the deductions.[6] In essence, the court held that Section 165(d) only applies when a taxpayer is at a loss instead of a net gain and “serves to prevent the [taxpayer] from using that loss to offset other income.” [7] However, if the taxpayer has a net gain, as the horse-race gambler did, then the taxpayer may deduct the expenses under Section 162, and Section 165(d) does not apply.[8]
Section 165(d) and Recreational Gamblers[edit]
In addition, in Valenti v. Commissioner, the court reiterated that Section 165(d) applies to professional gamblers as well as recreational gamblers.[9] The court stated, '.. it has been held both by this Court and various courts of appeals that wagering losses cannot be deducted, except to the extent of the taxpayer's gains from wagering activities, and it has been so held even where such activities were conducted as a trade or business as opposed to a hobby.'[10] Therefore, for example, if a recreational gambler visits a casino one Saturday and accumulates $600 of losses and $200 of gains, that recreational gambler may deduct $200 of the wagering losses (because she can only deduct an amount up to the amount of wagering gains she accrued).
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United Kingdom[edit]
In the United Kingdom, wins (unless in the course of a trade) are not taxable and losses are not deductible.
![]() Germany[edit]
In Germany, wins are taxable since July 2012 by 5% of the winnings (profit).
See also[edit]References[edit]
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