Estate Planning for the Stars, How to Own a T-Rex, and Your Taxes and the IRS On ESPN Radio – February 19, 2016 Show

Topics Covered:

1. Estate Planning for the Stars.

2. How to Own a T. rex?

3. Tax Scams To Avoid and Tips On Choosing A Tax Return Preparer.

4. Questions from our listeners:

• What are the different types of trusts and how do the benefits differ? Also, who do I go to in order to set up a trust? An accountant, financial planner, lawyer?
• If I made a bet on the Super Bowl and I won, is that “taxable income”?

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Jeff states: Yes sometimes we just have to take the money and run!

Good afternoon! Welcome to Inside Advantage – Your Financial And Tax Radio Show.

This is Board Certified Tax Attorney, Jeffrey B. Kahn, the principal attorney of the Law Offices Of Jeffrey B. Kahn, P.C. and head of the KahnTaxLaw team.

Windus states:

And this is Licensed Financial Planner, Windus A. Fernandez Brinkkord, Senior Vice President Of Investments at Trilogy Financial Services.

You are listening to our weekly radio show where we talk everything about finances and taxes from the ESPN 1700 AM Studio in San Diego, California.

Jeff states:

When it comes to knowing tax laws and paying taxes, let’s face it — everyone in the U.S. is either in tax trouble, on their way to tax trouble, or trying to avoid tax trouble!

Windus states:

And whether you are on the rebound or flying high, we have the information you need to make sound financial decisions and map out your strategy for success.

Jeff states:

Our show is broadcasted each Friday at 2:00PM Pacific Time and replays are available on demand by logging into the KahnTaxLaw website at www.kahntaxlaw.com.

Jeff states:

For today’s show we have coming up:

Segment 2 material: How to Own a T-Rex!

Windus states:

Also coming up is:

Segment 3 material: Tax Scams To Avoid and Tips On Choosing A Tax Return Preparer.

And of course towards the end of our show, we will be answering some of your questions.

Jeff starts chit chat with Windus.

Jeff states: So for today’s top story:

Estate Planning for the Stars: How best to organize your finances so you family doesn’t struggle with estate litigation.

http://www.crainsnewyork.com/article/20150318/CUSTOM/150319825/estate-planning-mistakes-lessons-from-the-stars; http://www.forbes.com/sites/trialandheirs/2014/02/10/five-estate-planning-lessons-from-the-paul-walker-estate/#6e07d11e5ffc; http://wmtoday.com/2015/03/05/5-epic-hollywood-estate-planning-fails/

Jeff states: We’ve had a rough start to 2016 and I’m not just talking about the global economy. We’re not even sixty days into the New Year and we’ve had to bid farewell to quite a few of our popular culture icons.

Windus replies: Our feelings aside, their families and loved one’s have been hit with even stronger grief. Dealing with the emotionally difficult parts of life is very trying and it only makes it harder if you haven’t prepared.

Jeff states: That’s right Windus, but we can learn from some of these epic Hollywood estate planning mistakes. And just in time too! Its tax season after all, time to get ahold of your local wealth management and tax experts.

Windus starts: Let’s look at a few example of estate planning gone wrong. First off, Phillip Seymour Hoffman was a beloved Hollywood icon. From The Big Lebowski to the role that earned him an Oscar in Capote, he was a very talented and versatile actor. Unfortunately after a drug overdose in 2014, his partner and mother of his three children, Marianne O’Donnell was left with a pretty hefty tax burden.

Jeff states: Despite his accountant’s advice, Hoffman decided not to create trusts for his children. Then by not marrying O’Donnell, a $15-million tax burden was tacked on to the transfer of the estate to his beneficiary. That amounts to around 40% of his $35 million net worth.

Windus replies: Not only would the estate have been transferred tax-free to O’Donnell had the two been married, but alternately, by not setting up a revocable trust, Hoffman fated his estate proceeding to probate. This is not only inefficient and expensive, but it also exposes family financial information to the public.

Jeff continues: Hoffman went wrong by relying on a Will rather than trusts. However, he also had not kept his Will up to date. The last revision of the document had been ten years prior to his departure, before his second and third child were born. In addition, he did not mention his mother, brother or any of his philanthropic causes, including non-profit theaters.

Windus states: No one will ever forget this next estate, or the memorable actor whose name headlined. James Gandolfini, aka Tony Soprano, died of a heart attack at the age of 51. No one expected that the IRS would end up being the biggest beneficiary of the estimated $70 million estate.

Jeff replies: Gandolfini also relied primarily on his Will instead of a more sophisticated estate taxing trust. In it he divided his estate between multiple beneficiaries including his friends, two sisters, and his son from a previous relationship, his most recent wife and his toddler daughter.

Windus continues: Regrettably, much of the estate that was being gifted was property and not liquid. When the IRS came knocking for its multi-million-dollars cut, the family had to succumb to fire-sale mode. The sole tax-free inheritance was the $7 million life insurance policy which was left to his teenage son.

Jeff states: The next notoriously eccentric actor, who had once rejected an Oscar because he felt Hollywood had mistreated Native Americans in films, illustrates an estate planning fiasco. Marlon Brando’s estate was already involved in more than two dozen lawsuits, five years after his death.

Windus replies: Most of these lawsuits arose from current and past employees of the actor’s estate who claimed that Brando had promised them particular assets, which were not mentioned in his estate plan.

Jeff states: Brando relied on his Will in this situation, too. The problem with his estate however, was that he had drafted a Will but ultimately his plans remained indeterminate.

Windus replies: Yet another Oscar worthy actor, Heath Ledger. Like Hoffman, Ledger fell to substance abuse in an accidental overdose of prescription drugs in 2008, just a few months after filming as The Joker in The Dark Night. The Australian actor and director did a horrible job at planning for his legacy.

Jeff continues: Once more, like Gandolfini, Ledger failed to update his Will after his daughter, Matilda Rose, was born. After that tragic night in his New York apartment, all of the 28 year old actor’s assets went to his parents and three sisters, in accordance with U.S. law. You guessed it, Matilda and her mother were left without any claim on the estate.

Windus replies: Fortunately, since Ledger was an Australian citizen, Matilda Rose’s guardians have filed for probate in the West Australian Supreme Court so that a judge might carve out a portion of Ledger’s fortune. Ledger’s estate was mostly held in Australian trusts and is more or less worth up to $20 million.

Jeff states: Our next icon never got to finish his last job. The passing of “Fast & Furious” series star, Paul Walker, was an ironically tragic death. The 40-year old actor died in 2013 in a car racing accident, as a passenger in a Porsche.

Windus states: Now Walker had a Will, a trust and $25 million in assets at the time of his passing. The issue was how it was set up. Walker had what you call a pour-over structured Will that had not been updated in 12 years to reflect current intentions.

Jeff replies: This means that his wealth-transfer was not only going to be a public affair but informed the public that his $25 million estate would be transferred to a trust that named his teenage daughter as the sole-beneficiary.

Windus continues: This brings to light key points when estate planning. For one, having a Will is only the beginning. The best estate planning tool for most people is a revocable trust, creating a simpler and less troublesome probate process.

Jeff replies: Furthermore, to be most effective, trusts need to be fully funded during life and not left to be funneled in through the Will afterward. If there is nothing to pass through the Will then the probate court process could be completely avoided.

Windus replies: In the case of Paul Walker leaving everything to his teenage daughter, naming a guardian for a minor is always a good idea. Walker did assign guardianship, but if he didn’t courts still favor custodial parent unless deemed unfit or the parent agrees to relinquish custody.

Jeff states: Most importantly, if all of these tragic young deaths haven’t emphasized this, do not wait until you’re older to have an estate plan in order. It pays to plan for the unexpected and not leave your loved ones with greater burdens.

Windus finishes: Finally, keep your estate plan up to date! So many things happen in life, whether it be marriages, children, grandchildren, close friends or other life events. It’s so very important to keep all of your documents up to date so your family doesn’t suffer the consequences.

Jeff states: Well it’s time for a break but stay tuned because we are going to tell you How to Own a T. rex.

You are listening to Board Certified Tax Attorney, Jeffrey B. Kahn, and Licensed Financial Planner, Windus A. Fernandez Brinkkord on Inside Advantage on ESPN.

BREAK

Jeff states: Welcome back. This is Inside Advantage – Your Financial And Tax Radio Show on ESPN and you are listening to Board Certified Tax Attorney, Jeffrey B. Kahn, and Licensed Financial Planner, Windus A. Fernandez Brinkkord.

Windus states: And before we continue with this next segment, I want to remind you that: Windus PLUG: Trilogy Financial Services will provide you with a retirement cash flow analysis which is a $600.00 value for free as long as you mention the Inside Advantage Radio Show when you call to make an appointment. Call my office to make an appointment to meet with me, Windus A. Fernandez Brinkkord. The number to call is 858.314.5169. That is 858.314.5169. Or visit www.guideyourstory.com.

A T. Rex of One’s Own: From movie stars to hedge fund managers to sheiks, how everyone wants their own dinosaur

(Credit: February’s issue of The Week, Vol. 16, Issue 758)

Windus states: Laurie Gwen Shapiro had a very interesting article about private dinosaur collecting in Issue 758 of The Week this month. Definitely not ideal for the humble estate plan, however movie stars, hedge-fund moguls and oil rich sheikhs are shelling out top dollar for dinosaur fossils at auctions.

Jeff replies: Desire for dino bones isn’t a trend either. In the 1870’s, the fossil frenzy began in Great Britain before spreading across the Atlantic, driving westward toward Wyoming. Interest intensified when The New York Journal and Advertiser ran the headline, “Most Colossal Animal Ever on Earth Just Found Out West.”

Windus continues: Although more false than factual, the real findings were of only a single leg bone of a creature. However, this sparked interest from philanthropist Andrew Carnegie who financed great discoveries in Wyoming and Utah.

Jeff states: Following Carnegie’s example, dinosaur collectors today make it difficult for museums to compete financially as the cost of fossils discovered on private lands are being astronomical. After all, who do you think is going to win in a bidding war with Nicolas Cage?

Windus replies: Glad you asked, Jeff. Remember back in 2007 when actors Leonardo DiCaprio and Nicolas Cage were trapped in a bidding war over a 32-inch Tyrannosaurus skull? Well, Cage triumphed over his opponent with a $276,000 offer.

Jeff continues: Other big name collectors include film directors James Cameron and Ron Howard, actor Brad Pitt, and Microsoft’s former chief technology officer Nathan Myhrvold who has a T. rex skeleton in his solarium in his large home in Washington.

Windus states: Keep in mind since these are priceless collectibles, they aren’t exactly liquid investments. What I mean by that is, if you’re in need of funds it’s not exactly easy to just find another home for your dinosaur. Honestly, some people are collectors and some people aren’t.

Jeff replies: Take Sue for example, the largest T. rex specimen ever found. It was offered by a private seller back in 1997 and even attracted the attention of Michael Jackson. After the excitement died down, it was the Field Museum of Chicago that walked away with the highest-priced dinosaur ever, with the closing bid at $8 million.

Windus continues: That kind of sale has never really happened again, though. More recently in fact, a couple of guys who had excavated a tetrapod and a large horned ceratopsian locked in mortal combat, tried their luck at Bonham’s in New York. There was a ton of publicity, the two men thought they’d be relaxing on a beach in the Bahamas for the rest of their lives but the piece didn’t even make reserve.

Jeff states: If by this point you’re thinking, “Man! I have to have a dinosaur!” You may want to consider going to Tucson, Arizona this month for that city’s annual mineral and fossil convention. People come from all over the world and they always have someone from Homeland Security and ICE there to deter the shadier dealers.

Windus replies: It should not be a surprise that in this industry there are sellers out there that knowingly are skirting the law. And when the government finds out that a buyer even in good faith acquired a piece that is contraband, the government will order its return to its rightful owner. Such was the case with the Tyrannosaurus skull that Nicolas Cage won in his bid over Leonardo DiCaprio which unbeknownst to him, had been smuggled out of Mongolia. He had to surrender it for return to Mongolia and so he lost the $276,000 he paid!

Jeff continues: Nevertheless there is still a lot of legal trade going on. As stated in an interview with Mark Norell, the world’s most famous paleontologist, of the American Museum of Natural History in New York, “crazy stuff goes to Dubai, to Qatar, and pretty regularly to Singapore. And there are all sorts of big odd collections in Germany.”

Windus states: Now if you are not able to get to Arizona this month, you can try the Astro Gallery of Gems, located in Manhattan on Fifth Avenue. It is the world’s largest gem and mineral store with a dinosaur dealership on the side.

Jeff continues: Owner Dennis Tanjeloff describes his ideal dinosaur customer as a grown-up boy who never got over the revelation that prehistoric animals were real. Salvador Dali and John Lennon were some of his most devoted clients.

Windus replies: Tanjeloff explains that many of his clients take pride in their collecting choices, most of them eventually donating their collections to research.

Jeff states: Ultimately, these pieces end up at a museum or university after the initial craze wears off. This is actually not a bad thing as it creates a write-off for the owner who is making a charitable contribution and now the public will have access to these pieces.

Windus replies: Looking back thirty years when you compare the prices for these pieces and even taking inflation into account, the increase in value is astronomical.

Jeff continues: Moving forward, Tanjeloff believes very strongly that this isn’t just a craze. He’s selling thousands of fossils a week and is looking forward to the investment opportunity of a relaunch of a section in FAO Schwartz that sells fossils next year. According to Tanjeloff, “boys who love dinosaurs, they’re our future customers.”

Windus concludes: So how are you going to afford all those amazing fossilized investments? You can figure that out by contacting me. At…

Windus PLUG: Trilogy Financial Services will provide you with a retirement cash flow analysis which is a $600.00 value for free as long as you mention the Inside Advantage Radio Show when you call to make an appointment. Call my office to make an appointment to meet with me, Windus A. Fernandez Brinkkord. The number to call is 858.314.5169. That is 858.314.5169. Or visit www.guideyourstory.com.

Jeff states: Stay tuned because after the break we are going to tell you Tax Scams To Avoid and Tips On Choosing A Tax Return Preparer.

You are listening to Board Certified Tax Attorney, Jeffrey B. Kahn, and Licensed Financial Planner, Windus A. Fernandez Brinkkord on Inside Advantage on ESPN.

BREAK

Jeff states: Welcome back. This is Inside Advantage – Your Financial And Tax Radio Show on ESPN and you are listening to Board Certified Tax Attorney, Jeffrey B. Kahn, and Licensed Financial Planner, Windus A. Fernandez Brinkkord.

Calling into the studio from my Walnut Creek Office is my associate attorney, Amy Spivey.

Chit chat with Amy

Scam Calls and Emails Using IRS as Bait Persist

Jeff states: Just yesterday I got a call to my office where the person said in response to a threatening call he received from someone who said he was from the IRS, he sent a $3,000.00 money gram to the person to avoid arrest. He did this even though he did not owe any taxes to the IRS and never received any letters from the IRS that there was a problem.

Windus asks: Jeff then why did he call you if he thought by paying the $3,000.00 he resolved this perceived problem?

Jeff replies: Because he then received another call from the same person acknowledging receipt of the $3,000.00 but saying that he made a mistake and that he should be sending $6,000.00!

Amy states: Scams using the IRS as a lure continue. They take many different forms. The most common scams are phone calls and emails from thieves who pretend to be from the IRS. They use the IRS name, logo or a fake website to try to steal your money. They may try to steal your identity too.

Amy continues: Be wary if you get an out-of-the-blue phone call or automated message from someone who claims to be from the IRS. Sometimes they say you owe money and must pay right away. Other times they say you are owed a refund and ask for your bank account information over the phone. Don’t fall for it.

Windus asks: Amy what tips do you have that will help our listeners avoid becoming a scam victim?

Amy replies: The real IRS will NOT:
• Call you to demand immediate payment. The IRS will not call you if you owe taxes without first sending you a bill in the mail.
• Demand tax payment and not allow you to question or appeal the amount you owe.
• Require that you pay your taxes a certain way. For example, demand that you pay with a prepaid debit card.
• Ask for your credit or debit card numbers over the phone.
• Threaten to bring in local police or other agencies to arrest you without paying.
• Threaten you with a lawsuit.

Jeff states: If you don’t owe taxes or have no reason to think that you do:
• Contact the Treasury Inspector General for Tax Administration. Use TIGTA’s “IRS Impersonation Scam Reporting” web page to report the incident.
• You should also report it to the Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov. Please add “IRS Telephone Scam” to the comments of your report.

Jeff continues: And if you think you may owe taxes, you should be calling ….

Jeff states: PLUG: The Law Offices Of Jeffrey B. Kahn, P.C. will provide you with a Tax Resolution Plan which is a $500.00 value for free as long as you mention the Inside Advantage Radio Show when you call to make an appointment. Call my office to make an appointment to meet with me, Jeffrey Kahn, right here in downtown San Diego or at one of my other offices close to you. The number to call is 866.494.6829. That is 866.494.6829.

Jeff asks Amy: Now the IRS also warns about phishing scams. What is that all about?

Amy replies: In most cases, an IRS phishing scam is an unsolicited, bogus email that claims to come from the IRS. They often use fake refunds, phony tax bills, or threats of an audit. Some emails link to sham websites that look real. The scammers’ goal is to lure victims to give up their personal and financial information. If they get what they’re after, they use it to steal a victim’s money and their identity.

Amy continues: If you get a ‘phishing’ email, the IRS offers this advice:
• Don’t reply to the message.
• Don’t give out your personal or financial information.
• Forward the email to phishing@irs.gov. Then delete it.
• Don’t open any attachments or click on any links. They may have malicious code that will infect your computer.

Tax Scams Involving Fake Charities

Jeff states: The IRS is warning taxpayers about groups masquerading as charitable organizations to attract donations from unsuspecting contributors.

Amy states: Fake charities set up by scam artists to steal your money or personal information are a recurring problem so taxpayers should take the time to research organizations before giving their hard-earned money.

Windus asks Amy: What tips do you have for taxpayers making charitable donations?

Amy replies:
• Be wary of charities with names that are similar to familiar or nationally known organizations. Some phony charities use names or websites that sound or look like those of respected, legitimate organizations. IRS.gov has a search feature, Exempt Organizations Select Check, which allows people to find legitimate, qualified charities to which donations may be tax-deductible. Legitimate charities will provide their Employer Identification Numbers (EIN), if requested, which can be used to verify their legitimacy through EO Select Check. It is advisable to double check using a charity’s EIN.
• Don’t give out personal financial information, such as Social Security numbers or passwords to anyone who solicits a contribution from you. Scam artists may use this information to steal your identity and money. People use credit card numbers to make legitimate donations but please be very careful when you are speaking with someone who has called you and you have not yet confirmed they are calling from a legitimate charity.
• Don’t give or send cash. For security and tax record purposes, contribute by check or credit card or another way that provides documentation of the gift.

Impersonation of Charitable Organizations Alleging To Help Victims Of Natural Disasters

Jeff states: Impersonation of Charitable Organizations is another long-standing type of abuse or fraud involves scams that occur in the wake of significant natural disasters.

Amy states: Following major disasters, it’s common for scam artists to impersonate charities to get money or private information from well-intentioned taxpayers. Scam artists can use a variety of tactics. Some scammers operating bogus charities may contact people by telephone or email to solicit money or financial information. They may even directly contact disaster victims and claim to be working for or on behalf of the IRS to help the victims file casualty loss claims and get tax refunds.

Amy continues: They may attempt to get personal financial information or Social Security numbers that can be used to steal the victims’ identities or financial resources. Bogus websites may solicit funds for disaster victims.

Jeff states: To help disaster victims, the IRS encourages taxpayers to donate to recognized charities. If you are a disaster victim call the IRS toll-free disaster assistance telephone number (1-866-562-5227) if you have questions about tax relief or disaster related tax issues. And don’t forget to find legitimate and qualified charities with Select Check search tool on IRS.gov. (EINs are frequently called federal tax identification numbers, which is the same as an EIN when using Select Check.)

Tips For Choosing Your Return Preparer.

Windus states: It is important to choose carefully when hiring an individual or firm to prepare your return. Well-intentioned taxpayers can be misled by preparers who don’t understand taxes or who mislead people into taking credits or deductions they aren’t entitled to in order to increase their fee. Every year, these types of tax preparers face everything from penalties to even jail time for defrauding their clients.

Windus asks Jeff and Amy for tips when choosing a tax preparer.

Amy replies: Ask if the preparer has an IRS Preparer Tax Identification Number (PTIN). Paid tax return preparers are required to register with the IRS, have a PTIN and include it on your filed tax return.

Jeff replies: Inquire whether the tax return preparer has a professional credential (enrolled agent, certified public accountant, or attorney), belongs to a professional organization or attends continuing education classes. A number of tax law changes, including the Affordable Care Act provisions, can be complex. A competent tax professional needs to be up-to-date in these matters. Tax return preparers aren’t required to have a professional credential, but make sure you understand the qualifications of the preparer you select.

Amy replies: Check the preparer’s qualifications. Use the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications. This tool can help you find a tax return preparer with the qualifications that you prefer. The Directory is a searchable and sortable listing of certain preparers registered with the IRS. It includes the name, city, state and zip code of:
o Attorneys
o CPAs
o Enrolled Agents
o Enrolled Retirement Plan Agents
o Enrolled Actuaries
o Annual Filing Season Program participants

Jeff replies: Check the preparer’s history. Ask the Better Business Bureau about the preparer. Check for disciplinary actions and the license status for credentialed preparers. For CPAs, check with the State Board of Accountancy. For attorneys, check with the State Bar Association. For Enrolled Agents, go to IRS.gov and search for “verify enrolled agent status” or check the Directory.

Jeff states: Even using a competent and honest tax return preparer, remember that taxpayers are legally responsible for what is on their tax return which is why …

PLUG: The Law Offices Of Jeffrey B. Kahn, P.C. will provide you with a Tax Resolution Plan which is a $500.00 value for free as long as you mention the Inside Advantage Radio Show when you call to make an appointment. Call my office to make an appointment to meet with me, Jeffrey Kahn, right here in downtown San Diego or at one of my other offices close to you. The number to call is 866.494.6829. That is 866.494.6829.

Thanks Amy for calling into the show. Amy says Thanks for having me.

Stay tuned as we will be taking some of your questions. You are listening to Board Certified Tax Attorney, Jeffrey B. Kahn, and Licensed Financial Planner, Windus A. Fernandez Brinkkord on Inside Advantage on ESPN.

BREAK

Jeff states: Welcome back. This is Inside Advantage – Your Financial And Tax Radio Show on ESPN and you are listening to Board Certified Tax Attorney, Jeffrey B. Kahn, and Licensed Financial Planner, Windus A. Fernandez Brinkkord.

And Windus and I always pleased to make our offers to our listeners where… PLUG: The Law Offices Of Jeffrey B. Kahn, P.C. will provide you with a Tax Resolution Plan which is a $500.00 value for free as long as you mention the Inside Advantage Radio Show when you call to make an appointment. Call my office to make an appointment to meet with me, Jeffrey Kahn, right here in downtown San Diego or at one of my other offices close to you. The number to call is 866.494.6829. That is 866.494.6829.

Windus states: Windus PLUG: Trilogy Financial Services will provide you with a retirement cash flow analysis which is a $600.00 value for free as long as you mention the Inside Advantage Radio Show when you call to make an appointment. Call my office to make an appointment to meet with me, Windus A. Fernandez Brinkkord. The number to call is 858.314.5169. That is 858.314.5169. Or visit www.guideyourstory.com.

You should also know that the securities and advisory services are offered through National Planning Corporation (NPC) Member FINRA, SIPC, and a Registered Investment Advisor. Trilogy Financial Services and NPC are separate and unrelated Entities.

Jeff states: If you would like to post a question for us to answer, you can go to my website at www.kahntaxlaw.com and click on “Radio Show”. You can then enter your question and maybe it will be selected for our show.

OK Windus, what questions have you pulled for us to answer?

1. Stephanie from Newport Beach asks: What are the different types of trusts and how do the benefits differ? Also, who do I go to in order to set up a trust? An accountant, financial planner, lawyer?

2. Steve from Los Angeles asks: – If I made a bet on the Super Bowl and I won, is that “taxable income”?

Answer: Taxpayers must report the full amount of their gambling winnings (with no reduction for gambling losses) for the year as income on Form 1040, and then deduct their gambling losses (up to the amount reported as gambling winnings) for the year separately on Schedule A (Form 1040) as a miscellaneous itemized deduction not subject to the 2 percent floor. When spouses file a joint return for the tax year, their combined gambling losses are deductible to the extent of their combined winnings. Gambling losses in excess of winnings are not deductible.

Professional gamblers, like casual gamblers, can deduct their gambling losses only up to the amount reported as gambling winnings. However, whereas casual gamblers must claim their gambling losses (up to the amount of their gambling winnings) as an itemized deduction, a professional gambler can deduct his or her losses (up to the amount of his or her winnings) as an above-the-line deduction in arriving at adjusted gross income.

Jeff states: Well we are reaching the end of our show.

Remember you can send us your questions by visiting the kahntaxlaw website at www.kahntaxlaw.com.

Windus states: Have a great day everyone!