Gambler argues it's her business; court lets her deduct losses

Pioneer Press ^ | 5-17-06 | SHANNON PRATHER

[Rakkasan1]

Estelle Busch may have been a loser at the slot machines, but she won when she took on the Minnesota state tax system.

The Minneapolis woman did it by claiming to work more than full time — 60 hours a week, in fact — at gambling. She said she won $1.5 million and lost $1.7 million over three years. The state said she couldn't deduct her gambling losses — $200,000 — under applicable Minnesota tax law.

Instead, the Department of Revenue audited her returns and demanded $102,000 in back taxes.

But Busch argued hers weren't gambling losses; she was running a business.

The state Supreme Court agreed and ruled she didn't owe the back taxes. Justices called it a "trade or business," even if it wasn't a terribly reasonable one to practice.

[Rakkasan1]

I wonder if I could deduct drinking costs.It's never made me any money.

[P-40]

Did her "business" have a tax ID number?

[Perdogg]

I always thought you could as long as you declared your winnings.

[Alberta's Child]

I was always under the impression that gambling losses were tax deductible as a rule to a certain extent -- i.e., that taxable winnings could be offset by documented losses. So if you win $50,000 in Las Vegas after losing $60,000 before that, you don't get to deduct the full $60,000 -- you simply itemize a $50,000 loss against your $50,000 "income" on your tax return.

[Drew68]

If you have to pay taxes on your winnings, you should be able to deduct them on your losses. Seems fair to me.

[Xenalyte]

My new job is triviameister at Nick's.

So I can deduct beer, Terminator nachos, and gas and mileage to get me the five blocks there and back.

[KarlInOhio]

I always thought you could as long as you declared your winnings.

You can in each year, but I didn't think you could carry over losses from one year to cover gains in other years.

However, if losing money prevented you from claiming what you do is a business, how could the US airlines still be considered businesses?

[GSlob]

"I wonder if I could deduct drinking costs."
Are you in wine tasting business?

[Allegra]

So I can deduct beer, Terminator nachos, and gas and mileage to get me the five blocks there and back.

So, then, you'll be picking up all the tabs in the future? Sweet!

[Rakkasan1]

well, sort of. I do beer and whisky tasting,too.

[no dems]

Hey, at least she's doing something. More than I can say for all these crack whores and crack heads (many of whom are white) who are drawing SSI because they are diagnosed as "bi-polar" when actually, their brains are just fried from drugs.

It would surprise you to find out how many young people in their twenties, in your community, are drawing SSI for bi-polar disorder. I guarantee you that 90% of them are druggies.

[Xenalyte]

Absolutely! As long as we talk bidness during our gathering, and since the bidness is trivia, that should be fairly easy to remember.

[RHINO369]

Its hard to tell what came first the chicken or the egg(bi polarity or drug use), but either way bi polarity shouldn't prevent anyone from working.

[Protagoras]

Did her "business" have a tax ID number?

If not,,it's not a business?

[P-40]

I always thought you could as long as you declared your winnings.

You can deduct them to a certain extent so long as you don't exceed your winnings. This lady is trying to claim them as ordinary operating losses from her business...and there are not many cases where I could see her being able to legitimately make that claim.

[Protagoras]

My new job is triviameister at Nick's.

You get paid for it?

So I can deduct beer, Terminator nachos, and gas and mileage to get me the five blocks there and back.

Against profits, you should be able to.

[P-40]

If not,,it's not a business?

It can be a business without a tax ID...but I'm curious what all this lady did to try and show she was engaging in business activity..and not consuming entertainment.

[Xenalyte]

If my team wins, we get a $25 bar tab, which covers an order of Terminator nachos and three big-ass Shiner drafts.

[Protagoras]

You can in each year, but I didn't think you could carry over losses from one year to cover gains in other years.

A small amount is allowed on some things, like losses on stock transactions. $3000 last time I looked.

[Protagoras]

Sitting in front of a computer screen pushing the button time after time with no possibilty of changing the outcome is entertainment?

LOL, for some perhaps.