Can you come close to even with VP in Vegas area

Sorry Money, you are wrong. Gambling has a specific set of rules that don't apply to other jobs.

“...[W]e conclude that if one's gambling activity is pursued full time, in good faith, and with regularity, to the production of income for a livelihood, and is not a mere hobby, it is a trade or business within the meaning of the statutes with which we are here concerned. Respondent Groetzinger satisfied that test in 1978. Constant and large scale effort on his part was made. Skill was required and was applied. He did what he did for a livelihood, though with a less-than-successful result. This was not a hobby or a passing fancy or an occasional bet for amusement.” Commissioner v. Groetzinger, 480 U.S. 23 at 35-36 (1987)]

Note that hobbies are not allowed in gambling.

Arc, I think that particular citation was in regards to a player who was losing and still wanted to claim it was a business and not a hobby. Could you check further? The basis for a business as opposed to a hobby is "profit." If you are making a profit you can report your profits as a business and take the appropriate deductions even if you have a negative return for a limited number of years. For a "hobby" you can deduct losses only to the extent of your profit.

This is why when you report your gambling losses on a Sched A you can only deduct your losses up to the amount of your wins. While if you qualify as a Schedule C business, in those unlucky years, you can show "negative income." On a schedule A, all you can show is "zero" for your losses which wiped out your gains.

Again, Ive never been in this situation because Ive never had a profitable year gambling. So perhaps some of our accountant friends on the board can comment.

But returning to your citation above -- I am pretty sure that case involved a gambler who was losing and still wanted to claim the deductions despite his losing year.

EDITED TO ADD: I found the citation you posted in another reference regarding gambling. take a look at this link:

https://www.gambling-law-us.com/Articles-Notes/online-gambling-tax.htm

And specifically at part 3 of the article which gives the opinion that you can be a professional gambler, file more than one Schedule C, and deduct the appropriate expenses even if you do not gamble full time.

I never said you couldn't deduct losses nor did I say it had to be full time. However, it cannot appear to be a hobby. You can't have some other kind of full-time employment and then gamble part time and file schedule C. That is all I have been saying. See this line in your reference.

They (the IRS) have rejected that status for some gamblers who maintain other businesses.

The big question is do you want to fight the IRS. Most just pay the fines an go on.

Arc, please read the article in the link I provided. This exact issue is discussed in that article.

I already read it. That is where all my references came from. Remember they are stating an opinion and clearly state that no ruling has been specifically made. However, I know that people have been audited and told they could not file schedule C unless it was their primary job. Much discussion of this topic on Vpfree over the last few years. As far as I know none of them fought it in court where they might have won. However, if they lost the cost to them would have been substantially more.

Look over this thread for example:

https://groups.yahoo.com/group/vpFREE/message/109292

" from my own conversations with the 10 auditors in
Reno that I work with on an almost daily basis. I can tell you that every
auditor handles gaming differently due to their lack of training and
understanding of gambling."

Yeah, like I said, I wish I had that problem of having a profit from gambling.... LOL

I do profit, so it is important to me. I have no other income producing job so I can go either way without too much concern. I finally decided to file as a pro last year as I got tired of losing thousands of dollars in medical deductions. It worked well since I only had a small profit in 2009. However, I had a rather large profit this past year and, while I haven't done my taxes yet, I have a feeling it may backfire on me.

Doesn't claiming medical bills in itemized deductions recover quite a bit of the expense? Or does Schedule C recover even more?

The problem is your medical deductions are limited based on your AGI. W2Gs increase the AGI significantly and one ends up losing a big chunk of the deductions.

Money

Even if you have a profit, you can't file schedule c as a professional gambler if you have earned income from employment. I tried it and the IRS denied it and made me submit amended return. Rules are completely different for gambling versus other businesses.

The Gambler