Finally there’s some positive news coming out of a court-room for US poker pros. The courts have decided that poker players in the US are now entitled to deduct business expenses when filing their tax returns.
Prior to the this recent ruling, there was a huge grey area as to what was actually permissible by law as far as gambling expense deductions were concerned. With the final ruling of a ten year old case involving Californian horse bettor Robert Mayo, finally some good news for poker pros.
Poker tax expert Ann-Margaret Johnston commented on the ruling in the Review Journal article:
“The recent ruling is a victory for poker players for a change. This makes it where we can finally treat the expenses by pros as actual write-offs even though they may not have income…All we need now is a ruling that losses can be taken when they exceed income and we will have it made!”
In the past, professional gamblers were only allowed to deduct expenses up to the amount they won but now following this ruling, gamblers will be permitted to adjust their past three years’ of returns, accordingly.
Don’t get too excited though, there is a stipulation in the law that in order to be able to make deductions you must be a professional gambler, which means most of your income has to come from gambling activities. I hope that doesn’t make you cancel that Vegas trip you started booking after reading the first few paragraphs.
Nevada’s Boyd School of Law professor Steve Johnson has made the distinction of the change in social status of a professional gambler following this ruling. Johnson commented in an article in the Review-Journal saying,
“What the decision says is that gambling is a business trade that is not any different than any other profession. A professional gambler can deduct business expenses.”