How do taxes work for those who make income by gambling? More below?

My friend wants to know the answer to this question. I tried to answer his question as an accounting student and failed. Can anybody else help? Any other details you can provide about this would be greatly appreciated by him.

"I want to borrow money, sources including friends and relatives, to gamble at offshore sportsbooks. Interest would be paid on their investment at the end of a designated term. First, this isn't "aiding and abetting" others to illegally gamble, correct? Assuming not, what would I do for taxes? I know very little in this area. Thanks in advance. "

All winnings are taxable as ordinary income. The interest you pay for the borrowed funds isn't deductible. Losses are deductible up to the amount of winnings, HOWEVER you must keep meticulous records to back that up.

If you're gambling at an offshore sportsbook,, do NOT even THINK of doing it from within the US! It's illegal. It's also nearly impossible to repatriate the funds as that is illegal and leaves the site's owners and operators subject to arrest if they ever step on US soil -- this HAS happened. If you're going to gamble with a foreign sports book, do it IN PERSON in the foreign country.

For those of you who think I'm blowing smoke on the illegal status of online gaming, refer to Title 18 USC, 搂 1084. Check it out: http://www.law.cornell.edu/uscode/18/usc...

TFTP Report It

You would pay taxes on any money you made gambling. You could write off your losses to the extent of your winnings. However, you better have great records of those losses.

Goes with out saying Tax is applicable on all income.*

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