This year, my wife and I had a net gain of $6350 across 2 online casinos. These casinos offered bonus funds for deposits that required 10x playthrough ($10 bonus funds required $100 in wagers) or casino cash that required 1x playthrough. I would receive the bonus funds, play a game that allowed me to efficiently playthrough while having both minimal losses (cash out ~70% of bonus funds) and profit (1% per win). 1% per win means I would wager $1 and win $1.01.
The amount of gambling winnings I had was very small, probably less than $50. All of the profit came from minimizing how much of the bonus funds I lost.
My question is, how do I calculate taxable income and losses? Is my taxable income the bonus funds and profits (~$50) and losses are the wagers that I lost? I will be itemizing anyway so it would just be a pain but I think I’d end at the same net taxable income that way. I assume I cannot just report my net gain. The bonus funds don’t have monetary value until I churned through them 10x, and as soon as the casino told me they had a real cash value I would withdraw the funds, so it doesn’t seem right to count all of the bonus funds as winnings, I’m just not sure how to do it. Does the entire $1.01 count as my winnings and I deduct every wager?
Thanks for any help you provide!
Posted by helos_kick_ass