DEAR HARRY: The son of a good friend recently turned 21, and he is starting to play serious poker in Atlantic City. Up to now, he has been playing on the Internet, and has won more than $75,000. He is very good at it. A few weeks ago, he turned $30,000 into $168,000 in one of the AC casinos. I'm sure you get the picture. He intends to do this regularly as a kind of full-time job. My concern is the tax implications. I know that a big hit on the slots is taxable with limited offsets for losses. I assume that the same is true regarding poker winnings. At his young age, failure to report income properly can get him started into a serious tax fraud. What do you suggest?
WHAT HARRY SAYS: I find this situation a very sad one. A gambler's life is rarely happy. I hope he gets a full-time job and gambles "lightly" as a hobby. The probability of continued spectacular winnings is tiny. He needs the advice of a tax expert (preferably a lawyer whose specialty is taxes) to keep him on the right side of the law on licenses and taxes. He also needs someone to rein him in so he doesn't get sliced up by someone who's better at the game than he is. Try to get his family involved in doing this.
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