Since last January, the "US Tax Court" of the United States decided that professional gamblers can now deduct their expenses when they were doing their annual tax return. The professional gambler is seen as a self-employed worker who has the same rights as other self-employed. It can also deduct his travel expenses, expense of rakes and his monetary losses when its tax return.
The problem remains to be determined what exactly is a "professional gambler".
According to Steve Johnson, a professor in the University of Nevada tax, "this decision of the Court informs us that gambling is a business as the other business of trade and that it must be subject to the same rules at the level of the tax. A professional gambler may deduct personal expenses as any other self-employed."
It is the decision of the Court which focused on the case of Robert Mayo, a professional gambler from California who in 2001, has bet a total of $ 131,760 on horse racing and who raised the sum of $ 120,463. Mr Mayo was then deducted for this year of $ 10,968 for its travel, its essence, its parking fees and other costs of expenses for his research.
The Court then determined that the $ 10,968 were not losses game, but costs expenses for a company.
Mr Mayo could then declare a negative turnover for this year.
Several people had fear that this decision to ensure that monsieur and madame tout-le-monde eventually declare their last trip to Vegas as being "of the companies expenses". What Judy Patterson, Vice President and Executive Director of the American Gaming Association in Washington, D.C. responds: "this decision will not affect many people. "It is very positive for the professional gamblers, but tell you that very few people will be in the eyes of the law, professional gamblers".
He added that to be seen in the eyes of the law as a gambler, you must complete many conditions and only a minority of people will be perceived as such. To be seen as a professional gambler he says, you don't have part-time gambler for fun, you must make it your main occupation and live your profits from the game. The law will be very strict.
The IRS (the equivalent of the ARC for the USA) does not clearly define what is a professional gambler for the moment. This will be case by case at the beginning, but further clarification will be made in the near future.
Other cases similar to that of Mr Mayo will be surely presented to the Court in the coming months following this decision and the judgments will help clarify the grey areas.
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