Tax Memorandum

The Internal Revenue Code (IRC) is the supreme source of income tax law. When trying to resolve an income tax question, a tax practitioner will look to other sources in addition to the IRC. For example, the tax practitioner may consult IRC regulations,

The tax court ruled in favor of the commissioner, rejecting the petitioner’s argument that “tournament poker, unlike other types of poker, is not a wagering activity.” The court reached its decision by first defining the term “wagering” using the term’s “plain, obvious, and rational meaning.” Therefore, the court adopted the dictionary meaning of “to wager,” which is defined as “to bet” or “the act of betting.” Based on this, the court concluded that “while there are differences between tournament poker and other types of poker, none rise to the level of meaningful, substantive differences that would warrant different tax treatment under the

Conclusion: Jane has a business. If time and effort put into the activity is intended to make a profit, this is considered a business. Business versus hobby is important because taxpayers who incorrectly report losses from hobby activities can be subject to additional taxes, interest and penalties in an audit (http://www.irsvideos.gov/Professional/HobbyBusiness)

3. Allen visits Reno, Nevada, once a year to gamble. This year his gambling loss was $25,000. He commented to you, “At least I didn’t have to pay for my airfare and hotel room. The casino paid that because I am such a good customer. That was worth at least $3,000. “What are the relevant tax issues for Allen?

Once a gain or loss is recognized, a taxpayer must determine how the recognized gain or loss affects the taxpayer’s tax liability. The character depends on a combination of two factors: purpose or use of the asset and holding period. The purpose or use of the asset is important because the law does not treat all assets equally. The general use categories are: (1) trade or business, (2) for the production of income (rental activities), (3) investment, and (4) personal. Based on these criteria, we can categorize an asset into one of three groups: (1) ordinary, (2) capital, or (3) section 1231. Characterizing the gain or loss is important because all gains and losses are not equal. Ordinary gains and losses are taxed at ordinary income rates, regardless of the holding

was as much a part of a miner?s possessions as was the pick with which he

In the case of Cohan vs. Commissioner, Cohan incurred expenses for traveling and entertainment, but he didn’t have receipts to substantiate them. He proved his deductions by testimony, and the court believed him. If the IRS is convinced by oral or written statements or other supporting evidence, and if you can approximate the expenses reasonably, you may be allowed to deduct the expenses associated with travel and meal even though you have failed to keep the records. However, you should remember that the Cohan Rule has been applied very narrowly, and doesn’t always work, especially for charitable deductions.

For years, Bachmann keeps coming to the casino until she got hooked and became a compulsive gambler. She gambled every money she has up to the point of losing everything. During those time, Bachmann had no idea that someday she would become one of the most important examples of whether people should bear responsibility for their habits. Bachmann’s problem with gambling slowly loses control over how much time and money she spent gambling. Although she thinks she is in control and she was aware of the bad effect it may cause, Bachmann continued gambling without seeking help. Other times she tried to cut down or stop but, many times she failed. She keeps hoping a big win will end her problems. She feared that her loved ones will find them out that drives her deeper into hiding and further into debt. She felt anxious and upset whenever she tried to change. I would also like to point out that Harrah’s Casino is partly to blame here. Their participation in Bachmann’s addiction is something to consider and look upon. They shower her with gifts such as: “free coupons, free buffets… free trip to Lake Tahoe with a suite, and tickets to Eagles concert” (Duhigg, pp. 247, 261) in which according to Bachmann is hard to resist. According to Bachmann’s lawyer, “she should not be held culpable because she had been reacting automatically to temptations that Harrah’s Casino put in front of her. Once the offers started rolling in,

2. This would create jobs. Both for the people like me that played for a living, and for people that would work for the companies that offer online gaming. These would be real jobs, and every one of these jobs would offer real taxable income.

Robert Kiyosaki once said, “Successful people take big risks knowing they might fall hard but they might succeed more than they ever dreamed.” This man is a billionaire that hit the jackpot, while gambling. He now owns eleven different businesses and he is worth over eighty million dollars. If someone could learn how to astute, they could live like him too. The articles, The Legalized Gambling Debate, Sports Betting Should be Legal, and Should Sports Gambling be Legal?, all attribute thought to this suggestion. Gambling is a feasible business as it provides revenue, sponsors education, and inspires gamblers.

This revenue procedure applies to a qualifying small business taxpayer as defined in section 5.01 with average gross receipts of $10,000,000 or less that is not

Gambling is no crime, so then he is not showing us a negative thing. If

The debate on whether or not gambling should be regarded acceptable from a moral point of view has been ongoing for quite a while. However, one aspect of gambling that has been overlooked frequently has got to do with individual freedom. Ordinarily, people should have a right to choose whether or not to engage in gambling. Indeed, the freedom accorded to individuals to engage in activities of their choice as long as they do not interfere with the freedom of others can be regarded one of the key determinants of a truly free society.

Utilitarianism suggests that the act that results in the greatest amount of happiness for the greatest number of individuals is the option that we should choose. Whether gambling should be deemed as an ethical or unethical act depends entirely on the consequences and benefits gambling has on casinos, gamblers, and non-gamblers. If gambling results in the overall increase of a casino’s profit and the overall increase of a gambler’s profit and mental health, then the act of gambling would be considered ethical. However, if the act has more negative implications than positive, then the act of gambling would be unethical. For example, it would be unethical if the transaction between casinos and gamblers was rigged solely for the casino 's financial benefit while exploiting those who gamble there. The significant concern of this paper is not to point a finger at casinos and other gambling mediums as a means to blame them for the mental conditions of those who we’d consider as gambling addicts. Instead, the point of this paper is to acknowledge the effects of gambling and propose the importance of responsibility. I will present an unbiased view of gambling, paying close attention to the psychological effects and motives individuals have regarding gambling at casinos. Also, I will look at the positive results associated with having a successful casino business, so that allowing gambling is ethical from a utilitarian point of

From commercial casinos to lottery tickets to off-track betting, it is easier to gamble today than ever before. While the government promotes the gambling industry to supplement tax revenues, it has not allocated