David in Dallas sends an FYI about a big ruling in Tax Court that should prove rather beneficial to poker players:

The key take-away is that poker losses are now deductible for professional gamblers beyond your profits, so you can carry them forward and backward to offset income in other years. You can file on Schedule C instead of Schedule A, which limits deductibility.

Of course, none of you probably have any losses to deduct, but it’s nice to know that you have the right anyway.

Wow. You know taxes and finance aren’t really my game, but if David’s correct, this reversal of interpretation seems nearly as big as the DOJ’s December flip on the Wire Act — microeconomic change poker players can believe in!? Even if my attachment of significance is a bit of a stretch, it probably was about time for the Feds to acknowledge that yes, they know now (after years of investigation), playing poker even semi-professionally comes with legitimate business expenses beyond your buy-in …but bummer for Dan personally, as losses suffered in the Pokerati game apparently are not deductible as marketing write-offs. (Crap, there goes my equity.)

Kinda a big step for poker players seeking a certain legitimacy for their profession. And who knew … “Tax Court,” it turns out, is a real place, not some reality show on Bravo or The Learning Channel.

A quick-and-dirty excerpt from the new issue of the (always-sexy) Journal of Accountancy that jumps right to the end for stuff that matters for poker players who at least occasionally find themselves reporting net-positive results is below:

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