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WALES

edcondon
2/28/2022
3:03:31 PM

ARE THE WALES' REBATES TAXABLE? THANK YOU

jeff
3/1/2022
11:46:04 AM

Rebates are part of the profit or loss from betting operations calculation - which for a small but successful two man whale team might look something like this:

Parimutuel Payoffs Collected:    5.25M
Amount Wagered:                 -5.43M
--------------------------------------
Profit or Loss Before Rebates:  -0.18M
Rebates:                         0.44M
--------------------------------------
Gross Profit Betting Operations: 0.26M
Less Operating Expenses:        -0.14M
--------------------------------------
Net Profit Betting Operations:   0.12M

The above example assumes a two man team that collected 5.25M in parimutuel payoffs, wagered 5.43M, and ended up losing about 180k for the year (0.9667 roi.)

But they earned 440k in rebates (about 8.1%) on their handle which when added back in gave them a gross profit of 260k.

The above example further assumes they have a partnership agreement whereby each is paid a 40k salary, and they also spent about 60k in deductible expenses (taxes, office rent, computers, etc.)

They netted 120k for the year which, per the partnership agreement, is retained by the business. Meaning they can bet a little more next year than they did the previous year.

The above is just an example. But yes, if you have profits from betting operations then you have taxable income, and rebates must be reported as one of your income sources.

-jp

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JCapper Message Board

General Discussion -- WALES

General Discussion
-- WALES