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Crypto Casinos and taxes in the U.S.

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by COINS NEWS 87 Views

I started gambling at a crypto casino using a VPN because it's illegal in the U.S. specifically CA. I use my brokerage to buy, transfer to my wallet, then send it to the casino. I had a slip up where I transferred straight from my bank to the casino once. I was surprised they didn't close my account and thought it might be an important detail to mention. I won big in November only to give it all back and more through the new year. I am now negative -$8,000 and recovering from gambling addiction.

Now as I'm filing taxes, I've imported my documents from my brokerage to find out my total gain is $55,000 with a cost basis of $6,000. I don't believe these numbers are correct because I liquidated maybe $20k and kept the rest ($15k) in crypto to keep as an 'investment'. I ended up blowing through my 'investment' and bought back in with the $20k and lost that too. It should have been $35k max. However, the online tax service I'm using states it needs revision but trying to modify a 1099-B is a bit confusing. In addition, the casino site I use does not provide any tax documents but does have my P/L which is -$1,800.

I knew I had to pay taxes on gains but how does it work if I lost it all? I didn't spend a $1 on myself with that money and the amount is more than my annual salary. I blew my life savings and have to start over. I now have to live with regret and fight a constant urge to gamble. I am trying to move on and need solutions. What is my best course of action here? Do CPA's know how to deal with these kind of situations?

submitted by /u/Solemainey
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