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Arbs and Taxes

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Author Topic: Arbs and Taxes  (Read 608 times)
barnstorm
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« on: December 25, 2016, 04:12:04 PM »

Can you consider the amount won on an arb to be your total winnings for U.S. tax purposes?

Or do you have to report the winning wagers as winnings and the losing wagers as losses?
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barnstorm
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« Reply #1 on: December 25, 2016, 04:19:23 PM »

Or maybe sports arbitrage is not considered gambling at all?

Then just report the net profit as regular income?
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barbero
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« Reply #2 on: December 27, 2016, 12:20:04 AM »

You will need to look for specific taxing legislation of your country (best way to go is to ask an expert in the field, will cost you a few $$$ but you'll get a better picture), but what I can tell you for sure is that it IS considered gambling by all means and there is certainly no acknowldgement of arbing as a profession.

On the other hand, IF your taxing local laws allow you to compensate wins and losses (they better do, else there's no way you can arb for a living AND pay your taxes!), then I think that you will need to report net winnings of the whole taxing period among all bookies, and be ready to show the detail: that you won X$ in bookie A, lost Y$ in bookie B, won Z$ in bookie C, etc (just in case you get investigated, which shouldn't be happening if your figures aren't too high... but this depends of your country, of course).

So yes, the sum of the amounts won on your arbs should be your total winnings if wins and losses can be balanced out according to your tax laws, but as I said I think best thing is to ask a tax attorney or equivalent, they gotta make their living too :P
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barnstorm
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« Reply #3 on: December 27, 2016, 03:56:30 AM »

If one is arbing and has to report all the winning bets as income, it will be staggeringly high and probably trigger an audit because one is betting large amounts.
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barbero
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« Reply #4 on: December 27, 2016, 12:53:37 PM »

Yep but most likely (and hopefully) you'll only need to report net winnings (i.e. winning bets - losing bets). But better check local laws, in some countries it works this way but it's not 100% sure like that everywhere.
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barnstorm
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« Reply #5 on: December 27, 2016, 02:33:24 PM »

In the U.S, the only way to net winnings is to prove yourself a "professional gambler," but then you owe Self Employment tax of 15%. Otherwise, you have to report hundreds of thousands of dollars of winnings as Misc. income and report hundreds of thousands of dollars of losses under itemized deductions. That won't look good, but it would be legit.

Has anyone here from the U.S. filed as an Arber? Which route did you take?

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tek
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« Reply #6 on: December 28, 2016, 11:03:12 PM »

Im afraid Í don't have anything to add specifically about your situation OP. Also I was under the impression that online sports betting was illegal in the US. Am I wrong in that assumption?

Oh and are there any Dutch arbers here? I would love to meet some who have some experience with the local tax regulations in Holland :)

Cheers!
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