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Originally Posted by DaHoss9698
Fair? How so?
If I go to the track Monday through Thursday and bet $1000 a day and lose, by Friday I'm down $4000. So, on Friday I go and invest another $1000 only this time I hit a pick 4 and it pays $5100. I end up with a profit of $100 for the week. I'd have no problem paying 25% on that $100. The problem is, I'd have to pay 25% on the $5,100 hit I made. So my $100 profit for the week just became a loss after uncle Sam takes their unfair cut. Again, what's fair about it?
I took that almost word for word from Exotic betting. I'm not this smart.
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In your scenario, you have wagered $5000 and won $5100. $1275 was deducted from the $5100 (if my math is right). You are able to deduct your losses equal to the amount of your winnings. So you are able to deduct $5100 for losses and claim income of $5100 from your winnings. However, $1275 has already been deducted from your winnings so you have overpaid this portion by $1275. Now my philosophy could be wrong here, but I think this is how it would work.
The gov't is going to get theirs, I would prefer that the law to be that it is paid upfront is all.