A. Yes. The same rules that apply to gambling at other venues—racetracks and casinos—generally apply to online gambling, even if it originates outside the country.
Your son should report his winnings, but he can use any gambling losses to offset the winnings. Losses must be written off as itemized deductions on Schedule A, so he can’t use the standard deduction.
How can you verify online poker wins and losses? You can use financial records from a bank, credit card or Web-based cash account (e.g., NETeller) that shows transactions to and from the poker site. Note: Tax rules take into account all winnings and losses during the year. Example: Your son may have won $25,000 at online poker but suffered documented gambling losses of $30,000 from a Las Vegas junket. That loss completely wipes out any tax that would’ve been due on his winnings.
- Small Business Tax Deduction Strategies No matches