Online gambling and how it effects your tax return
Online Poker Players: Beware!
Most taxpayers that are into gambling action are aware of gambling wins and losses and how they are reported on a tax return. What you may not be aware of is a new case that may set precedence to require you to report funds in foreign gaming accounts.
What you need to know
It was ruled that a foreign account for poker and other gaming may be considered a foreign bank account. If you have this type of account, you may need to be report that those holdings on a Foreign Bank Financial Form or FBAR.
Who may need to file an FBAR?
- You have online gaming account where funds are held abroad and you are a U.S. resident
- The accounts are open in your name, you have financial interest, or signature authority
- You are able to withdraw and deposit money into this account
- Your balances of one or all accounts exceed $10,000 at any time
The bottom line: United States v Hom is only one case. These findings may or may not have any bearing on taxpayers. I believe the ruling and case will set some precedent on how the IRS handles off shore gambling in the future. If you have questions about the need to file an FBAR for this or any other reason seek out qualified tax attorneys in your area. The IRS does not play “games”!
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