Online Gambling and the IRS?

Jade Ohno: Legal or illegal for the federal income tax return all worldwide gross income from all sources are reported on the correct lines of the 1040 tax form.Gambling winning would be entered on page 1 of the 1040 line 21 other income and identified online gambling and then the dollar amount in your case 5000 of winning income and your limited losses up to the 5000 winnings amount that you would have to able to prove would have to be entered ont he schedule A itemized deductions of the 1040 tax form as a part of your miscellaneous dedcutions that would be be subject to the 2% of adjusted gross income limit.Hope you find the above information helpful good luck to you....Show more

Judie Kise: The IRS no longer does random audits. There are a variety of "red flags" and audits are chosen from that pool.The big difference for you is that you cannot offset your losses with legal winnings. For instance, in Vegas if you lost $1000 in one casino and walked next door and ! won 5000 you would only be liable for 4000 in winnings. Since offshore gambling is illegal nationally you cannot take that deduction.If your receiving payments from an offshore gambling site, it qualifies as a red flag and will increase the odds of an audit. and that my friend is real gambling....Show more

Michelle Sohre: The law change a couple of years ago did not make it illegal to gamble online. I have included some information on that. Also, it would be incorrect to state that most gambling sites are Canadian. That simply isn't true. If you win a significant amount of money online and then place it in an American bank account, you should definitely report it to the IRS and pay your tax on it. The government has not got a history of arresting people for gambling on the Internet. But tax evasion, they would love to make an example of you for that. By the way, the anti gambling bill you refer to actually made it 100% legal for American companies to offer online hors! e race betting. So if that's your thing there is no gray area,! it is offered extensively these days. Guess which industry put up a big bribe to certain politicians?!?...Show more

Jon Bergmeier: you just said the magic word---illegalIRS does not recognize illegal, therefore your losses are not deductible