Can my husband start a business (sole proprietor, LLC, etc) for a gambling business? My husband is a programmer and in his free time has developed sophisticated analytical software to analyze certain markets. Then when he has traveled to Canada, he has placed several bets. 2014 was the first year he did this and he made roughly 20k which we plan to report on our taxes as gambling wins. However, we are wondering whether this can be a true side business for tax purposes in order to reduce the profits by costs incurred (server costs for software, fees, etc)? If it continues to go well, there is potential to consider doing this full time, and if it's a true business, I assume we can create some form of 401ks as well.
Does anyone have any links to resources that can help us learn how to set up a business and whether gambling qualifies? Any other tips are appreciated!
