As Tax Agents and accountants we get asked this quite often. Some countries are taxed on their gambling winnings. Australia is the lucky country and the income derived from these activities is not taxable for three main reasons:-
- Gambling Losses Tax Deductible Australia 2020
- Gambling Losses Tax Deductible Australia 2019
- Gambling Losses Tax Deductible Australia Income Tax
- Gambling Losses Tax Deductible Australia Tax
Losses are allowed as an itemized deduction dollar for dollar against the gain. Gambling losses cannot be greater than gambling wins for the tax year. Example: John wins $23,500 during the year playing slots and other casino games. His gambling losses are $37,900.
Gambling Losses Tax Deductible Australia 2020
1) It’s generally not considered a profession. It’s a hobby or recreational activity.
2) Gambling is generally seen to have a large element of luck in it. Most would be gamblers would lose money rather than win. For that reason the ATO would not be prepared to deduct losses from gambling.
Gambling Losses Tax Deductible Australia 2019
3) The government taxes the gambling operators instead. Also the government will charge the operators to become officially licensed Have a great day watching the race that stops the nation and gamble responsibly
Gambling Losses Tax Deductible Australia Income Tax
RichKid
PlanYourTrade > TradeYourPlan
- Gross gambling income is reported on page one of Form 1040, while gambling losses are a miscellaneous itemized deduction (not subject to the 2%-of-adjusted-gross-income (AGI) limit). Taxpayers often believe their winnings are immune from reporting unless they receive a Form W-2G.
- Gambling losses: If you risked some cash on gambling over the year, you might be able to write off some of the losses ― but only up to the amount of gambling winnings. “So you can’t deduct $500 spent throughout the year on lottery tickets unless you won at least $500,” Janas said.
Gambling Losses Tax Deductible Australia Tax
Does anyone know much about financial spread betting?
You more or less bet on the direction of a share price or index. IG determines the spread. IG has many markets and method built around it. IG Index's site for spread betting
http://www.igindex.com.au/content/index.html
PAY NO TAX?
The main advantage is supposed to be that you don't pay tax but that is controversial. I asked for a PDS but they didn't send me one.
Here's an article from The Australian explaining how it works
http://www.theaustralian.news.com.au/common/story_page/0,5744,10019882%5E643,00.html
The attraction is that you don't pay tax on your winnings but the ATO had made a ruling saying that it was assessable income. IG and the taxpayer involved plan to appeal it and litigate the matter if required but I have not found any cases.
Apparently the NSW gambling industry is not too happy about it as it would mean more competition.
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From the PDS:
http://www.igindex.com.au/content/files/IGI_PDS1.pdf
6.2 Betting profits and losses
General position
Ordinarily gains from gambling or wagering transactions are not
assessable (nor are losses deductible) for Australian income tax or capital
gains purposes, but the tax treatment may differ depending on your
personal circumstances, for example if your trading is done in the course
of carrying on a business. Factors that may be taken into account in
deciding if a taxpayer is carrying on a business include whether the
gambling is conducted in a systematic, organised and businesslike way,
the volume and size of the gambling, whether the gambling is related to,
or part of, other activities of a businesslike character,whether the form of
gambling is likely to reward skill or judgment or depend largely on chance
and whether the taxpayer is gambling principally for profit or for pleasure.
We are aware that the ATO has issued a private ruling under which it has
ruled, in respect of the individual seeking the ruling, that the winnings
were assessable as income and as a capital gain on the basis, amongst
other things, that entering into a spread bet is so likely to reward skill and
judgement and so commercial in nature that winnings will be assessable
income, even if it is accepted that the bet is gambling, is not made in the
course of carrying on a business and is an isolated transaction.We
disagree with the ATO’s ruling.The individual who has received the ruling
has informed us that they will be objecting against the ruling, and that if
they do not receive a satisfactory response, they (in conjunction with us)
will pursue the matter as a test case through the court system, to establish
a judicial ruling on whether winnings are assessable income and losses are
allowable deductions.
The above is a summary only and should not be relied upon as being
applicable to your own circumstances. If you require further information,
you may wish to consult the ATO.
Consult your tax adviser
We strongly recommend that you consult your own tax adviser before
deciding to open an account and enter into any Spread Betting transactions.
----
If anyone has any views or experience on this I'm sure all us keen 'punters' would be glad to hear it. I'm really attracted to the idea of not paying tax!
The info above is only how I see it, as I normally just stick to simple transactions I may have got something wrong so let me know.
You more or less bet on the direction of a share price or index. IG determines the spread. IG has many markets and method built around it. IG Index's site for spread betting
http://www.igindex.com.au/content/index.html
PAY NO TAX?
The main advantage is supposed to be that you don't pay tax but that is controversial. I asked for a PDS but they didn't send me one.
Here's an article from The Australian explaining how it works
http://www.theaustralian.news.com.au/common/story_page/0,5744,10019882%5E643,00.html
The attraction is that you don't pay tax on your winnings but the ATO had made a ruling saying that it was assessable income. IG and the taxpayer involved plan to appeal it and litigate the matter if required but I have not found any cases.
Apparently the NSW gambling industry is not too happy about it as it would mean more competition.
------
From the PDS:
http://www.igindex.com.au/content/files/IGI_PDS1.pdf
6.2 Betting profits and losses
General position
Ordinarily gains from gambling or wagering transactions are not
assessable (nor are losses deductible) for Australian income tax or capital
gains purposes, but the tax treatment may differ depending on your
personal circumstances, for example if your trading is done in the course
of carrying on a business. Factors that may be taken into account in
deciding if a taxpayer is carrying on a business include whether the
gambling is conducted in a systematic, organised and businesslike way,
the volume and size of the gambling, whether the gambling is related to,
or part of, other activities of a businesslike character,whether the form of
gambling is likely to reward skill or judgment or depend largely on chance
and whether the taxpayer is gambling principally for profit or for pleasure.
We are aware that the ATO has issued a private ruling under which it has
ruled, in respect of the individual seeking the ruling, that the winnings
were assessable as income and as a capital gain on the basis, amongst
other things, that entering into a spread bet is so likely to reward skill and
judgement and so commercial in nature that winnings will be assessable
income, even if it is accepted that the bet is gambling, is not made in the
course of carrying on a business and is an isolated transaction.We
disagree with the ATO’s ruling.The individual who has received the ruling
has informed us that they will be objecting against the ruling, and that if
they do not receive a satisfactory response, they (in conjunction with us)
will pursue the matter as a test case through the court system, to establish
a judicial ruling on whether winnings are assessable income and losses are
allowable deductions.
The above is a summary only and should not be relied upon as being
applicable to your own circumstances. If you require further information,
you may wish to consult the ATO.
Consult your tax adviser
We strongly recommend that you consult your own tax adviser before
deciding to open an account and enter into any Spread Betting transactions.
----
If anyone has any views or experience on this I'm sure all us keen 'punters' would be glad to hear it. I'm really attracted to the idea of not paying tax!
The info above is only how I see it, as I normally just stick to simple transactions I may have got something wrong so let me know.