irs laws are wrong on winnings

[iluvsummer]

If you hit a royal on a 25 cent machine you won't get a wg2 but hit it on a 50 cent machine and you will.You collect 1,000 on a 1.25 wager no tax you collect 2,000 on a 2.50 wager and you get taxed.One guy  sits down and plays two 25 cent machines side by side. On the first hand he hits the royal  he moves over to the next machine and hits the royal on the first hand.He invested 2.50 and collects 1,000 twice for a profit of 1,997.50 and he does not get a wg2.The other guy sits down at a 50 cent machine and on the first hand he hits the royal.He gets 2,000 minus his 2.50 investment he has a profit of 1,997.50 and he gets a wg2.How can the irs justify this obvious flaw in their taxing policy?
 
 

[Eduardo]

I think both have to pay taxes at end of year it is just that they don't want to hassle everyone on the spot with every win because that would take so long so they set a minimum that you have to pay on the spot and the rest you pay at the end of the year minus your losses. I could be wrong though. That would keep people from cheating on the big wins where it would cost the most.
 
Is that right?

[iluvsummer]

without  a wg2  there is no way the irs would know that player one won 1997.00 on a 2.50 investment.If ten players hit a 1,000 royal flush on a quarter machine no taxes are taken out of 10,000 in winning jackpots.Yet if 5 players hit a 2,000 royal flush on a 50 cent machine the irs collects taxes on 10,000 in winning jackpots.Whats wrong with this picture?

[Tedlark]

iluvsummer - check your math. If 5 people hit a $1,000.00 dollar royal it totals only $5,000.00, not $10,000.00.

[MikeA]

I find myself in agreement with you about the wins Rob S....reported or not, according to IRS regs, you are liable whether the casino reports it or not.

[jm002546]

  His math was fine - 50 cent machine.  I'm no tax expert but if the IRS isdue tax on $100 winnings one day,  and $200 loss the next day requiresschedule a  to claim, then it's totally unfair, which fits the IRS modus opperfectly - screw the common man.

[shadowman]

It's even unfair when you itemize deductions. The W2Gs get added into your AGI which determines several other deductions (medical, etc).  The only ones that can avoid these problems file as professional gamblers ... and that requires some pretty substantial backup docs.

[Tedlark]

Oops, oops. I read iluvsummer's post too fast today and I got the math wrong, too focused on watching my Nittany Lions I guess.