FlyerTalk Forums - View Single Post - if someone win some money playing slots overseas, do he/she have to pay taxes in US?
Old Aug 16, 2010 | 7:43 pm
  #31  
UK Traveler
 
Join Date: May 2009
Location: CID, MSN
Programs: UA, AA, Delta
Posts: 245
Originally Posted by bankops
1. "US Persons" are taxable on worldwide income. A US Person is a US Citizen AND any non-US Citizen who is a resident OR a Green-card holder (the Green card gives the right of residency, so they can come after you and then up to you to prove that you weren't in the US).

2. The State Department, NOT the IRS, requires that you declare any account outside of the US where the average balance exceeds $10k.

3. The requirement on making a declaration if crossing the border with >$10k is in force in Russia, Ukraine, EU, Turkey, US, etc, etc. This is not necessarily a tax issue, but it is a way the countries make sure that there is no tax issue before the money is gone. This covers the movement of monetary instruments. Gold jewelry is NOT considered a monetary instrument (watch out for coins though) and is the reason that so many people in the Middle East convert their money to jewelry when returning home, to avoid this issue

4. There are only a handful (actually less) of countries in the world that tax worlwide income of their citizens. The US is the ONLY OECD country to do so (there are exceptions for inheretance tax or temporary absence cases).

5. Deducting gambling losses is possible, if properly documented (this could include hotel and airplane tickets if at casinos outside of the US) AND if you file itemized deductions. Gambling loss carryforwards not permitted, even if professional.

6. The earned tax credit is only available if you file. If you do not file, then the IRS will tax you on dollar 1, instead of dollar 80,001.

7. This is a basic tax question that ANY practicing CPA could answer, so why in the world waste your money on a tax lawyer? Overkill comes to mind.

As a former bad guy, this is excellent advice. You don't need a tax attorney. You might want a tax professional to prepare your tax return as their might be Foreign Tax Credit available to you.

Gambling losses are deductible on Schedule A (itemized deductions), but are not subject to the 2% limitation. They are not deductible in excess of gambling winnings.
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