Dodging Taxes

[Balloon guy 158]

Okay, so here's my idea.Create a Nevada Corp, Balloon Guy's Poker Players INC. Then hire myself and friends as independant contractors. When I win a bracelet at the WSOP 2007 I will take the winnings and put them into the corp. Let's say I win $1,000,000.00Then I will have the corp pay for us to fly to Monaco to play poker there, will probably cost me around $100,000.00. We will eat well, play poker and live like kings.Then fly to Atlantic City to play poker, stay in the nicest hotel, etc. Cost $50,000.00Next Vegas and the big game, buy in for $400,000.00, nice hotel, etc.After losses/wins etc. and this month of adventure the company is now at about $300,000.00 left form the original winnings.I will get to deduct ALL the cost for playing poker ( the purpose of the corporation. ) and only have to pay taxes on the $300K that is left?So The government gets about $130K, I get $170K and have lived the wild and crazy life of a rich slob for 2-3 months.The alternative is to pay taxes on the million to California and Federal so closer to 55%, which means I get $450K from the million.Will this work?Can I be a nevada corp and play poker, therby dodging California tax?And can I write off all expenses used to play poker, no matter how extravagant?Accountants, time to redeem yourself after the Moneymaker incident

[quadaces 0]

I dont see why not. but I'm not an accountant

[Dratj 0]

Okay, so here's my idea.Create a Nevada Corp, Balloon Guy's Poker Players INC. Then hire myself and friends as independant contractors. When I win a bracelet at the WSOP 2007 I will take the winnings and put them into the corp. Let's say I win $1,000,000.00Then I will have the corp pay for us to fly to Monaco to play poker there, will probably cost me around $100,000.00. We will eat well, play poker and live like kings.Then fly to Atlantic City to play poker, stay in the nicest hotel, etc. Cost $50,000.00Next Vegas and the big game, buy in for $400,000.00, nice hotel, etc.After losses/wins etc. and this month of adventure the company is now at about $300,000.00 left form the original winnings.I will get to deduct ALL the cost for playing poker ( the purpose of the corporation. ) and only have to pay taxes on the $300K that is left?So The government gets about $130K, I get $170K and have lived the wild and crazy life of a rich slob for 2-3 months.The alternative is to pay taxes on the million to California and Federal so closer to 55%, which means I get $450K from the million.Will this work?Can I be a nevada corp and play poker, therby dodging California tax?And can I write off all expenses used to play poker, no matter how extravagant?Accountants, time to redeem yourself after the Moneymaker incident

Why make it so complicated? Declare yourself a pro and then you can deduct travelling expenses to poker tournnaments. You would of course deduct the 400k loss in the big game even if you were an amatuer. I don't think a corporation is needed.

[BRossignol 0]

Nope, nope and nope. The first problem is that forming a corporation for the sole purpose of gambling would be highly questionable at best and a BIG red flag more than likely.Second, you can only deduct one half of travel costs for business, not 100%.Your better bet would be to form an offshore corporation on the island of Nevis and have them set up a bank account for the corporation as well. Then pay that corporation half of all of your initial winnings for providing their services of teaching you to play poker, etc.You will have the other half, but then you set up a domestic corporation, and invest your money in it, which loses a bundle the first year and should come pretty close to zeroing you out.Thereafter, the corporation in Nevis will stake you for your play in the future. You keep 10% of all winnings and they get the other 90%. The 90% is completely untaxable.When you need access to the funds in the offshore account, you have one of several choices:1. They will give you a Visa card that attaches to your account, like a check card, but really a credit card -- however, do not use this because, in January Visa supplied the IRS with a list of all holders of these cards.2. Fly to Nevis and bring cash back3. Wire the money into your bank -- don't do this either because now the money is traceable4. Pay a courier service to periodically fly cash from Nevis for you (this is fairly inexpensive compared to the amount of money you save in taxes)The authorities in Nevis cannot divulge the ownership info of the corporate ownership nor of the bank account.I have *heard* that this works rather well, but would have no firsthand knowledge of such things.

[Balloon guy 158]

Why make it so complicated? Declare yourself a pro and then you can deduct travelling expenses to poker tournnaments. You would of course deduct the 400k loss in the big game even if you were an amatuer. I don't think a corporation is needed.

Need Nevada Corp to avoid California 18% tax.

Nope, nope and nope. The first problem is that forming a corporation for the sole purpose of gambling would be highly questionable at best and a BIG red flag more than likely.Second, you can only deduct one half of travel costs for business, not 100%.Your better bet would be to form an offshore corporation on the island of Nevis and have them set up a bank account for the corporation as well. Then pay that corporation half of all of your initial winnings for providing their services of teaching you to play poker, etc.You will have the other half, but then you set up a domestic corporation, and invest your money in it, which loses a bundle the first year and should come pretty close to zeroing you out.Thereafter, the corporation in Nevis will stake you for your play in the future. You keep 10% of all winnings and they get the other 90%. The 90% is completely untaxable.When you need access to the funds in the offshore account, you have one of several choices:1. They will give you a Visa card that attaches to your account, like a check card, but really a credit card -- however, do not use this because, in January Visa supplied the IRS with a list of all holders of these cards.2. Fly to Nevis and bring cash back3. Wire the money into your bank -- don't do this either because now the money is traceable4. Pay a courier service to periodically fly cash from Nevis for you (this is fairly inexpensive compared to the amount of money you save in taxes)The authorities in Nevis cannot divulge the ownership info of the corporate ownership nor of the bank account.I have *heard* that this works rather well, but would have no firsthand knowledge of such things.

AHHHHHHHHHHHHHHthank you sir

[Dr_Shakes 0]

Or you could just pay the taxes.Or stop driving on our roads.

[Dratj 0]

Nope, nope and nope. The first problem is that forming a corporation for the sole purpose of gambling would be highly questionable at best and a BIG red flag more than likely.Second, you can only deduct one half of travel costs for business, not 100%.Your better bet would be to form an offshore corporation on the island of Nevis and have them set up a bank account for the corporation as well. Then pay that corporation half of all of your initial winnings for providing their services of teaching you to play poker, etc.You will have the other half, but then you set up a domestic corporation, and invest your money in it, which loses a bundle the first year and should come pretty close to zeroing you out.Thereafter, the corporation in Nevis will stake you for your play in the future. You keep 10% of all winnings and they get the other 90%. The 90% is completely untaxable.When you need access to the funds in the offshore account, you have one of several choices:1. They will give you a Visa card that attaches to your account, like a check card, but really a credit card -- however, do not use this because, in January Visa supplied the IRS with a list of all holders of these cards.2. Fly to Nevis and bring cash back3. Wire the money into your bank -- don't do this either because now the money is traceable4. Pay a courier service to periodically fly cash from Nevis for you (this is fairly inexpensive compared to the amount of money you save in taxes)The authorities in Nevis cannot divulge the ownership info of the corporate ownership nor of the bank account.I have *heard* that this works rather well, but would have no firsthand knowledge of such things.

Where is this island of Nevis? Isn't it likely you are going to get caught with transporting money throught a courier service?

[Hotmark777 0]

OKFirst, the offshore thing will never work. period. Why, because the Government takes their share before you can take it from the casino. You will never get the whole amount withdrawn. Since you are a resident of, say Cali. they will take the taxes first. even if you did get it for some reason, they will tax you based on your winnings and residence. As soon as you win a tourney of $600.00 you get a Form WG2, there is no hiding!!!What you need to do is.Declare yourself a Pro.Create a Nevada Corporation.Have the funds moved to your "corporation"Start creating Write-offs, losses, travel, Clothes, books, training etc.Why does this work, because "you" as a pro "are" a business! You are then allowed to create a company around your viable trade, i.e., Poker, Golf, Modeling. Anything that uses "you" as the product or marketable entity so to speak.In doing this you avoid the 18% California tax when you take your funds, when you detail out your taxes at the end of the year, you have to Itemize of course, with as many legitamate "business" expenses as possible.You can not avoid the Federal Tax, but by doing this you avoid your state taxes.Your CarMileagefoodValetCell PhoneClothesMagazinesbooksInternet costs (like Live at the Bike)And of course all those losses you suffered while at the Casinos!!! ;)Why A Nevada Corp? Because they have found a way to keep the government from getting too nosy!! Period! (look it up on the internet, your writing that cost off anyway...Right?)AND Best of all. It is ALL LEGAL!!!Not that I have done any of this or know from experience. ;o)

[eYank 0]

i wont be an accountant for 5 more years, but come on, anyone can see that it wont work lolit was a nice plan though

[GWCGWC 83]

I have an idea.....lets get this Fair Tax inacted and completely change the federal tax code. Then you'd be paying your fair amount of taxes by flying around and spending that dough.

[ford0067 0]

I have an idea.....lets get this Fair Tax inacted and completely change the federal tax code. Then you'd be paying your fair amount of taxes by flying around and spending that dough.

[BRossignol 0]

Where is this island of Nevis? Isn't it likely you are going to get caught with transporting money throught a courier service?

Caribbean... I know, strange name, isn't it? Could at least be 'St. Nevis'.Nope. There are several couriers who operate private flights. You can get $100K transported for as little as $2500. They are quite discrete.As for the winnings, that is true for tourney winnings. However, have your corporation file for an ITIN and then the casino doesn't hold back any percentage and the corporation is responsible for the taxes that would be owed to its own government. IOW.... ZERO$. The corp kicks you a check for your 10% and you are liable for the taxes on that only.Seriously, look it up.

[Dub2131 0]

From all I can tell, this has to be a joke thread. On the off-chance it's not:1. Anything off-shore is a serious no-no. That has been the hot button for the IRS of late. If you're doing stuff out there, they will find out.2. It not as easy as having a NV corp to avoid CA taxes, if you're a CA resident. Very difficult, in fact.3. Theoretically, you could only take the $400k buy-in as a deduction if you lost it all. There's no benefit there, you're still out the money. If you just kept it and paid taxes, you'd still have more than $250k.

[Teavis 0]

Live in the mountains and grow a beard/kidnap lots of ladies.

[stevedar 0]

From all I can tell, this has to be a joke thread. On the off-chance it's not:1. Anything off-shore is a serious no-no. That has been the hot button for the IRS of late. If you're doing stuff out there, they will find out.2. It not as easy as having a NV corp to avoid CA taxes, if you're a CA resident. Very difficult, in fact.3. Theoretically, you could only take the $400k buy-in as a deduction if you lost it all. There's no benefit there, you're still out the money. If you just kept it and paid taxes, you'd still have more than $250k.

1. Balloon guy is republican, so they won't assume he's a terrorist so they'll leave him alone2. He would ideally have someone from nevada on the papers of the nv corp.3. You could always sell your chips for cash

[brvheart 1,757]

Live in the mountains and grow a beard/kidnap lots of ladies.

Teavis, are you from Nevis?

[El Guapo 8]

Setting up a corp in Nevada has nothing to do where you pay taxes, the reason people use Nevada and Deleware is they are more leanient if you have to file bankruptcy, not exactly sure what the difference is. I al;most set up a CA corp and we were going to file in one of those two places.I am not positive on this, but since you are "working" in Nevada when you get your winnings, you may fall under their state tax laws. You may have to do something shwoing this. I know this has been an issue for sports players who get signed by a Canandian team e.g Vince Carter w/ Raptors, when he playes home games his income was taxed at the higher Candaian tax level, it is the same for players going there to play there couple games a year.

[Scott3705 0]

I think you probably forgot the most important thing. In order to write off $700,000, that means you would have actually had to blow through $700,000. What would your mother say if you told her you basically blew through a million dollars flying to two places to play poker?

[leftygolfer 7]

Setting up a corp in Nevada has nothing to do where you pay taxes, the reason people use Nevada and Deleware is they are more leanient if you have to file bankruptcy, not exactly sure what the difference is.

Um, I don't think so.The bankruptcy laws are federal, so it doesn't matter what state you set up a corporation.Delaware is well known as a corporate haven, and thus, over 50% of US publicly-traded corporations and 58% of the Fortune 500 companies are incorporated in Delaware. Critics of the predominance of Delaware corporate law believe that Delaware's laws and courts are excessively friendly to corporations. This is due to Delaware being the first state to promote tax-friendly policies--especially since Delaware was too small (it is the second smallest state) to be of importance in the Union. Though, proponents point out that many states' laws, for instance Nevada's, are more friendly to corporations than Delaware's, especially in offering protection from hostile takeovers. They believe that Delaware's popularity has other reasons, such as the fact that, because of the large number of major corporations chartered in Delaware, the courts in that state are more experienced in the application of corporate law than the courts of other states. Because of the extensive experience of the Delaware courts, Delaware has a more well-developed body of case law than other states, which serves to give corporations and their counsel greater guidance on matters of corporate governance and transaction liablility issues.Some mistakenly believe that Delaware's preeminance is related to the fact that Delaware charges no income tax to corporations not operating within the state. However, in this respect Delaware is no different from other states, as no state charges income tax on out-of-state income. A state does levy a franchise tax on corporations incorporated in it. Franchise taxes in Delaware are actually far higher than in most other states, which typically charge little or nothing beyond corporate income taxes on the portion of the corporation's business done in that state. For instance, Nevada does not have a franchise tax. Delaware's franchise taxes supply about one-fifth of its state revenue.

[GoingBusto 0]

A state does levy a franchise tax on corporations incorporated in it. Franchise taxes in Delaware are actually far higher than in most other states, which typically charge little or nothing beyond corporate income taxes on the portion of the corporation's business done in that state. For instance, Nevada does not have a franchise tax. Delaware's franchise taxes supply about one-fifth of its state revenue.

Good reply. I'll add to it that although foreign corps incorporated in Delaware or NV do not have to pay tax to those respective states on income earned out of state, this does not preclude the corporation from paying taxes as a foreign corporation to the state or states in which they earn income.Thus, inasmuch as you could earn income as a NV corp in CA, you may still be liable for CA corporate income tax. I have ZERO knowledge of the CA corporate tax structure, however, so that may or may not be the case. But incorporating in NV or DE does not absolve the corporation of all state tax liabilities in the state in which it operates and earns income.GB

[nutzbuster 7]

A little off topic but since we are in poker Tax accounting mode, here goes...I won my Main Event seat, cash, and tons of swag from Bodog this year, totaling over $13,000.00.To break in down, it included:* My WSOP buy in $10,000 which they paid for directly to the Rio (no money exchanged directly to me)* $2500 cash, which I transfered to my bank* around $500 worth of clothes, Oakleys, I-pod nano etc.How much should be/needs to be reported to the good 'ol IRS this spring?Thanks in advance!

[alf13 0]

A little off topic but since we are in poker Tax accounting mode, here goes...I won my Main Event seat, cash, and tons of swag from Bodog this year, totaling over $13,000.00.To break in down, it included:* My WSOP buy in $10,000 which they paid for directly to the Rio (no money exchanged directly to me)* $2500 cash, which I transfered to my bank* around $500 worth of clothes, Oakleys, I-pod nano etc.How much should be/needs to be reported to the good 'ol IRS this spring?Thanks in advance!

Nothing.

[MyPlayIsRAB 0]

Nothing.

$2500 actually.. whatever he put in his banki dont know how it works in the states, but in canad if youre not a professional gambler you pay zero taxes on any winnings. so, move to canada eh

[alf13 0]

$2500 actually.. whatever he put in his banki dont know how it works in the states, but in canad if youre not a professional gambler you pay zero taxes on any winnings. so, move to canada eh

I repeat. NOTHING.An accountant will come around to tell him why.

[MyPlayIsRAB 0]

I repeat. NOTHING.An accountant will come around to tell him why.

isnt the 2500$ the actual net win and thats what americans are taxed on? also, the 500$ could be considered a taxable gift as well?