Are Your Prepared for These Year End Income Tax Issues?

Over the course of the year, I’m sure you’ve noticed the ridiculous way our Congress has acted to update our tax laws. By including tax code provisions in a highway bill, a mass transit bill, and a trade package bill- plus within the Bipartisan Budget Act and the PATH (Protecting Americans from Tax Hikes) Acts. (Those last two were, indeed, logical places to regulate taxes.)

There is a chance that the lame duck Congressional session may act on some tax regulations, but given that these folks work about 1 day a week- and then complain how many lazy folks are out across the US not entering the workforce (that is the pot calling the kettle black)- I am not sanguine they will. So, unless they do- this will be the last year that mortgage insurance will be deductible and foreclosed home debt will not be a taxable situation, among a few other items that expire this calendar year.

But, I figured it would be helpful if I combined all these changes into a coherent mass (which our legislators clearly have not), so you can be prepared for the 2016 tax season. (Remember, you file your taxes for 2016 by April 2017. Oh- and if you are a business, the odds are the date your taxes are due, also changed. More on that below.)

Students and Teachers (PATH Act provisions)

Students got a permanent change for deductibility of tuition via the American Opportunity Tax Credit. This provides up to $ 2500 of tax credit for lower-income filers for the first four years of higher education (with a possibility of 40% of the unused credit being received as a refund- if no other taxes are owed). As long as the students are enrolled at least half time for one term of the year and not convicted of drug violations. The real change is that filers must include the EIN of the college or university involved- and demonstrate that they paid the tuition and fees they claim- not what the institutions may list on the 1098-T form.

On the other hand, the tuition deduction for other students will expire at the end of this year. Oh, and that generous (sic) deduction teachers get for buying supplies for their students that schools don’t supply is now permanent- all $ 250 of it. (Most teachers spend at least twice that!)

Pensions and IRA

Folks older than 70.5 years of age no longer have to rush to transfer their IRA (or portions thereof) to charity, because that provision is permanent. (PATH) Please note that the IRS demands that these transfers not be rollovers. One must employ a trustee to transfer the funds; and that trustee cannot hand you the funds to deliver to the charity. If they do, you lose the exemption. No surprises I am sure when I remind you that there must be a contemporaneous acknowledgement (that means a timely receipt) from the charity for that deductible donation or transfer.

Heirs and Estates

While still in the wrong venue, the Highway Bill did fix a big problem. Folks (or entities) that inherit assets from an estate are now required to use the basis filed in the 706 form for their own calculations. (Just so you know, the rules stipulate that estates can value items as per the date of death, or by alternate choice 9 months after that date. Too many “cheaters” would use a different basis for the property they inherited, thereby cheating the tax authorities with alternative valuations.)

To keep this rule in place, executors are now required to stipulate (i.e., file for 8971 and Schedule A of the 706) said value to all heirs and to the IRS. Which means anyone who inherits property- and thought they didn’t need to file Form 706 because the value of the estate was below the threshold for Estate Tax better reconsider. Otherwise, the heirs may be hit with a penalty for using the wrong basis for that inherited asset when they dispose of same.

Why? Because if a 706 form is never filed, the basis of all assets inherited is now defined as ZERO!!!!! It gets worse. Because if an asset were omitted from Form 706, the basis of that property is now determined to also be ZERO. (Unless the statute of limitations is still opened, when an Amended 706 can be filed to correct this omission.)

Another kicker. If the 706 form is filed LATE, the basis of all assets that should have been included are also set at ZERO. Some tax advisors feel this one little provision could be challenged in court. But, let’s just be prudent and file all those 706 Estate Tax returns in a timely fashion. (Filing a 706 when the estate value is below the filing threshold is called a Protective 706 Filing; we’ve been doing those for years. And, we strenuously examine the assets often to the consternation of the heirs- to ensure that all the non-worthless assets are included. You know, that 36 diamond tennis bracelet your grandma promised you would inherit when you turned 16.)

Oh, yeah. Another really big kicker for this little item. Under IRC 6501, the IRS has three years to catch cheaters who misstate certain items (like income taxes [except for continuing fraud], employment taxes, excise taxes, and for this provision- estate taxes and the results therefrom). No more. If an asset from an estate is misstated so that it can affect more than 25% of the gross income on a tax return will now have a SIX year statute of limitation.

Mileage Rates

Not surprisingly, the mileage rates for 2016 are lower than they were last year. Business mileage is now deducted as 54 cents a mile; driving for reasons that are medical or moving are only worth 19 cents each. When we drive to help a charity, we only get 14 cents a mile.

As is normally true, we have no clue what those rates will be for 2017. The IRS normally prepares those well into the calendar year.

Real Estate

The PATH ACT made permanent the ability of taxpayers to contribute real property to qualified conservation charities.

Health and Health Insurance

The Highway Bill (yup) came up with a bouquet of flowers for our veterans and folks currently serving in the military. No longer will they be unable to contribute or use HSA (Health Savings Accounts) should they receive VA or armed service benefits.

Along that same vein, the Highway Bill enabled all those who purchase- or are provided by their employers- high deductible insurances (about $ 1500 for a single person) to use HSAs, too.

Oh, and assuming Obamacare is not overturned, there is a permanent exemption from penalties for those receiving VA or TriCare Health Benefits. (For employers, the Highway Bill also exempts all such employees from being included in determining the 50 employee (full-time or equivalent) threshold provisions.)


There were more than a few changes for employers. More than the exemption for the VA and armed service personnel from inclusion in Obamacare provisions mentioned above.

Like ALL 1099s and W-2 are now due by 31 January. That’s a big change for many folks who barely get their stuff together to file 1099’s. It means that companies need to contact their tax professionals really early- to let them verify that all relevant contractors and consultants receive those 1099s on time. Because the penalties have also increased.

The Work Opportunity Credit has been extended through 2019. This applies to Veterans (which is why you keep hearing Comcast advertising its commitment to hire some 10,000 veterans over the next few years- they’re no dummies). Other targeted groups include what are termed those receiving Temporary Assistance for Needy Families (TANF), SNAP (what used to be termed Food Stamp) recipients, ex-felons, and some of those living in “empowerment zones”.

Families and Individuals

The PATH ACt made the enhanced child tax credit (up to $ 1000, income dependent) a permanent provision of the code. As well as the Earned Income Tax Credit provisions that were to expire.

Social Security taxes are not going up per se- but the income basis upon which one pays them is. For the last two years, there was a tax holiday for all wage income (or self-employed income) that exceeded $ 118,500. Next year (2017), the taxes will be collected for totals of up to $ 127,200.

If an employee is working overseas and has income and/or a housing allowance, the exclusion provisions have also changed. For 2016, foreign income of $ 101,300 could be excluded from taxation, as could housing benefits that were $ 16,208 or less. Starting 2017, those exclusions become $ 102,100 and $ 16,336, respectively.

There also is further clarification of these foreign exclusions. In particular, these will affect those in the merchant marine or working aboard cruise lines. Because the IRS now holds that when one is in a foreign port, then one is able to claim foreign income. But… when someone operates in international waters, that is NOT a foreign country. That income must be computed (by the number of days one is on said waters) and is not excludable!

Individuals, Businesses, Trusts, Non-Profits that have Foreign Accounts

Some big changes affect those who must file those FBARs (Foreign Bank and Financial Accounts). It used to be you had to report any holdings in a bank, stock account, commodities or future accounts, mutual funds, or [pay attention to this one] poker, gambling or gaming site account that was not a US domicile by 30 June. (This also means a foreign insurance policy that has a cash value or foreign retirement accounts [including inheritances] is a foreign account.) It also covers recent immigrants to the US! These filings are due at the same time as your income tax return. But, while there never was an extension possible for these forms, now there is – for the same six months that obtains for your personal tax filings.

A foreign account does not mean that using the Royal Bank of Scotland to house funds in New York City; but having a Citicorp account that is based in Jerusalem or London does. The critical consideration is where the local branch is situated, where the account was opened. By the way, accessing foreign funds via PayPal means you have a foreign account.

The FBAR filing uses Form 114 and must be now filed electronically. The requirement to file applies to all taxable entities (individuals and businesses) that have $ 10,000 or more of value on any given day during the tax year. And, the conversion rate for said value is no longer allowed to be daily- but determined by the value on the last day of the tax year.

There is a new interpretation, too. The requirement to file applies not just to the account owner(s), but to anyone with signature authority. So, that means people like me that maintain client accounts overseas will now have to file these forms, because I can issue checks on those accounts. (I am not responsible for about 100 of them where I write the checks for the clients- but have no signature authority.) It also means employees of corporations or businesses or estates that have foreign funds and have signature authority must also file Form 114.

All business entities (and trusts and non-profits) should recognize that all entities – and individuals who work for or at those entities- that have signature authority for a foreign bank account, stock account, gaming or gambling account are subject to these provisions. In other words, all foreign money holdings may subject employees, not just officers of the institutions, to these provisions.

Oh. The IRS also requires those foreign entities where you may or may not have money to file Form 8938, a FATCA (Foreign Account Tax Compliance Act) filing. This covers those financial accounts, stocks, securities, contracts, interests- anything that exceeds the filing threshold. These rules also apply to American entities (individuals, businesses, trusts, etc. that have such interests in excess of the filing threshold! (If one resides in the US, those thresholds are $ 50K for individuals, $ 75$ for married folks on the last day of the year- or $ 100K and $ 150K at any time during the tax year. Those numbers increase by a factor of 4 if one doesn’t reside in the US; the thresholds are $ 200K, $ 300K, $ 400K, and $ 600K, respectively.)


The PATH Act changed the 179 (the capital purchases write-off provisions) Election. For good. The maximum Section 179 write-off is now permanent. (It had been extended for a year or two each time Congress had made a change for a while.) That maximum is also to be adjusted for inflation starting this year, which is why it is now $ 510,000. Moreover, there is a phaseout when the amount of new capitalized property exceeds $ 2.03 million, but not to zero.

Real Estate

For real estate purchases, the maximum Section 179 exclusion is now also $ 500K. (Last year, it was capped at $ 250K.) This includes HVAC (heating, ventilation, and air conditioning), which is a new change. Any recapture of this credit (due to an early sale) is now considered subject to ordinary income taxes.

The time to depreciate real estate is now 15 years for qualified leasehold improvements, restaurants, and retail improvements. Bonus depreciation is also allowed for the first half of said improvement value (through 2017), decreasing in 2018 to only 40%, 30% in 2019 and removed completely by 2020. The PATH Act also let bonus depreciation apply to 39 year property (for improvements that were already in service by the entity).

Automobiles (Luxury)

The depreciation limits for vehicles is limited to $ 3160 or 20% of the basis in 2016. However, this year one can write off up to $ 8000 in bonus deprecation (which is reduced to $ 6400 in 2018, $ 4800 in 2019 and then removed forever by 2020) for new (not used) automobiles. Of course, these numbers apply only to vehicles that are used completely for business. There is a reduction for vehicle use that is not fully attributed to business usage.


The Bipartisan Budget Act (the one that taxes would normally be addressed) has brought a sea change to the way partnerships will be treated, should the IRS find problems with their tax submissions. The changes do not take effect for a few years- but the time to address the changes is really now.

Basically, the Act stipulates that any change that comes about by an audit are to be collected directly from the partnership- unless the partnership elects out of TEFRA (Tax Equity and Fiscal Responsibility Act of 1982). So, it means that partnership formation, operations, new partner admissions, etc. will all have to be reconsidered.

What changed is this- the partnership can decide to accept an IRS decision that the underpayment is due from the partnership itself or it can elect to have that decision divided up among the partners, according to their percentage ownership or liability percentage. Most advisors are telling partnerships to elect the latter process. If the partnership does not so choose, then the IRS will assess the partnership at the highest tax rate allowed- 39.6%. Of course, if the partnership can prove (to the satisfaction of the IRS) that a lower rate is appropriate, based upon the individual tax rates of the partners, then a lower rate may be allowed. (Don’t bank on the IRS doing so.) However, this underpayment will not be allowed to change the basis of each of the partner’s interests, if the partnership is taxes for the liability.

If the partnership pushes the issues down to the partner level, then each partner is assessed for the tax at its own rate. And, the partnership can issue an adjusted (amended) K-1 for the IRS revisions that will change the basis and avoid the double taxation possibility. The partnership has 45 days from the date of the IRS notice of change to make this election.

There is another change that affects partnerships- the PAL (passive active loss) issue. Why? Because most partners and partnerships do not maintain pristine time records. (This also affects real estate rentals that are reported on Schedule E, page 1.) There are various definitions that set the PAL issues- for real estate professionals it is a minimum of 750 hours of work a year. The IRS has allowed other partnerships to use different designations, such as 500 hours, or the fact that a particular partner does all the work (even if less than 500 hours), or even when a partner spends 100 hours or more on the partnership and no one else does more.

But, the rules to prove how much participation are gelling. One can use a record of cell phone call records, eMails, or credit card charges. Travel itineraries and receipts can prove how much participation was involved. Even affidavits from customers and clients can be used to prove the time one participated in the venture.

Payments Due

The IRS has been starved to death for years by Congress. Partly because one party was angry that the IRS was not automatically granting those “social welfare” organizations (read as political collections and donation farms) tax exemptions without scrutiny. Partly because the IRS is responsible for collecting the penalties for those who don’t comply with Obamacare. (Hoping that this lack of funds would make it harder for them to do so.)

But, in my humble opinion, the solution Congress came up with sucks. The IRS has now been authorized to hire those bottom feeders- the outside collection agents, that harass and subject folks to all sorts of intimidation. The logic behind this choice? After all, folks who owe the IRS must be the scum of the earth. (Of course, no one ever considers the fact that the IRS makes mistakes, chooses random numbers to assess non-filing taxpayers who may actually owe nothing, etc.)

Many clients fall short of having sufficient funds to pay their taxes when due. This entails the taxpayer submitting a form 9465 (Installment Agreement Request). These must be automatically approved if the taxpayer [individual] owes (or will owe) the IRS $ 50,000 or less, with the addition of this request- and all tax forms have been timely submitted. (Businesses are limited to a $ 25,000 maximum, with the same provisos.) However, the fees involved to have the IRS process the request have been increased to $ 120, unless the taxpayer agrees to have the IRS zap their bank account automatically each month. Then, the fees are reduced to $ 52. (The IRS has way too many taxpayers “forgetting” to make timely payments. This is a way to incur fewer manpower issues for the service.) However, no matter how the payment is to be processed by the IRS, all low-income taxpayers (a family of 4, with $60K or less in income) won’t have to pay more than $ 43 to institute a payment plan.

The biggest issue? Any taxpayer who is not in compliance with IRS code, who has no installment agreement in place, and owes $ 50,000 in taxes, penalties, and interest can find his passport revoked IMMEDIATELY. (If one is not yet issued, don’t expect the Department of State to issue one, either.)

Filing Dates


There has been no change in the due date for 1040 filing, in that it is still due on 15 April (or the next business day, should the 15th fall on a weekend or legal holiday). Unless you can prove you were out of the country on 15 April- then you have the right to extend the filing date to 15 June. Or, you filed an extension request- that gives you until 15 October (with the same proviso for when it falls on a weekend or legal holiday).


Here’s where the big changes arrive. And, it is about time. Because too many pass-through entities have been screwing over their partners, their stockholders by delaying their filing. Oh, sure, they may pay a penalty, but that doesn’t help the multitudes who can’t file their taxes in a timely fashion due to the lassitude of these entities.

So, from now on, all pass through entities- those are partnerships, LLCs, and S entities must no file their tax returns by the 15th day of the 3rd month after the end of their tax year. Recognize that the IRS allows companies that have “good” reasons to not use a natural year (i.e., 1 January to 31 December) to chose another month to end their tax year. But, for most entities, the due date will now be 15 March. Which gives the partners or the stockholders a month to finish their own tax returns. (Firms that operate on the US Government year, which ends 30 September, for example, must file their taxes by 15 November.)

Regular Corporations (C entities) no longer have to file by the 15th day of the 3rd month, but now have until the 4th month. So, for those companies operating on a natural year basis, the due date has been extended (permanently) from 15 March to 15 April. (A similar 15th day of the 4th month after year-end applies for those not operating on a natural year basis.)

Business, Trusts, Non-Profits, and Pension Plan Extensions

There is one more change for C corporations. Their extension is no longer 6 months long- but 5 months. In other words, before when they had to file by 15 March, but could extend the due date until 15 September… still have that same final extended due date, regardless that the original filing date is now 15 April.

Partnerships and S entities still have a 6 month extension- which also falls (for those who use a natural year) on 15 September.

Trusts and Estates of the Deceased file form 1041. The only extension request provided 5 months beyond the due date. Now, the due date is 5.5 months. That means the due date for filing is 15 April, but an extension means the due date can be 30 September.

Non-Profit entities file form 990 on 15 May- or the 15th day of the 5th month after the end of their fiscal year. Extensions used to be provided for 3 months; they now have more time- six month extensions are the new rules.

Employee Benefit Plans (Pension Plans, 401(k), welfare plans) must file their tax returns with the IRS by the last day of the 7th month after their year end. (For natural year plans, that means 31 July). Before the plans could extend that deadline by 2.5 months; now the rule provides for an additional month to 3.5 months.

Late Filing Penalties

The minimum penalty for filing late (more than 60 days) has been increased from $ 135 to $ 205. Except in certain cases, that penalty can be reduced to the amount of tax owed, which ever is smaller. (By 2017, the penalty will go up to $ 210.)

Which entities are affected by this change? Individuals (all forms 1040, including non-citizens). Estates and Trusts (Form 1041). Corporate Files (all forms of the 1120 filing). And, Non-Profit entities that can file a 990-T (they have unrelated business income of $ 1000 or more.)

There are more penalties, too. These were included in the Trade Package Legislation. The act included late filing of 1099 forms, W-2s, and 1095 (Health Care Reporting). You will note that the deadlines for some of these forms have been moved up- so pay attention and file them on time. Because the penalties can be $ 1060 for each delinquent 1099 form- because you have intentionally filed late to the government AND to the payee!

Of course, if you file the 1099 only 30 days late, the penalty is $ 50 (again- for each – the payee and the government). If you get your act together by 1 August, the penalty is $ 100 (again, for each). And, if you miss that date, the penalty is $ 250 each- unless the IRS feels it was intentional (and you know that number is $ 530).

There you have the big changes for the year. Now, you should be ready to file your taxes comes the 1rst of the year. But, don’t expect really fast refunds (as one would have expected before). Because the IRS is going to be checking to make sure the taxpayer is legit- they don’t want all those identity theft and tax fraud situations to obtain.

The Definitive Art of Bookmaking and Odds Compiling

To appreciate the Job of the Bookmaker we must first dissect the methods and criteria to which he lends himself.

He must create or compile the Odds of each and every horse race on every race card. Every single day.

This is a very difficult Job and mistakes are often made.

So in order to gain an edge when betting we need to find any faults or mistakes that may occur during the compiling process.

The complete process of compiling will be known as creating “The Book”.

This will be addressed in the following 9 stages.

Understanding the numbers is vital to anyone serious about betting to win!

This will be outlined in the following nine stages-

The Odds

The Fractions

The Percentages

The Decimals

The probability

The value

The Margins

The predicted chance of success

Compiling the Book

Stage 1

Let us start with the Odds

There are two types of odds

Absolute odds and indefinite odds

To distinguish between the two-

Absolute odds are the toss of a coin is 50/50 or Evens

Therefore you have a 50% chance of it being Heads and a 50% chance of it being Tails

Now if I was to offer you 5/1 for it being Heads this would be known as indefinite odds, an enticer or a teaser if you like!

Basically all bookmakers offer indefinite odds that are unbalanced and designed to entice

This is where they incorporate the Margin/the over round / the over broke or spread

Two Sides two every coin

For every bet there is a need for two parties to have different opinions of a betting outcome

For the purpose of this exercise these will be known as

Party A. (the Bookmaker/layer. Or he who offers the odds)


Party B. (the Backer/the bettor or he who takes the odds)

There are also two sides to the actual odds

These are known as odds on and odds against

What this basically means is that if party A Offers 2/1 and Party B. Accepts those odds


Party A will have odds of 1/ 2 and Party B will have odds of 2/ 1

This works with “odds on” equations to.

For example-

The- “odds on” Wager offered by party A. Maybe 1/6

In this case party B will take the odds of 1/6 and party A would secure himself odds of 6/1 + His/hers profit Margin.

(This profit Margin is known as the over round. The over broke. The spread or just profit margin)

Now for a bookmaker to guarantee himself overall profit he must apply a simple rule known as “odds coupling.

Odds coupling

This is always applied when compiling a book for any individual event

So realistically the odds on offer are indefinite, you would not get 1/3 for party B opposing 3/1 for party A

Basically “Odds coupling” is when the odds are slightly disproportionate to each other when compiling both sides of probability to a bet

This can easily be recognised when betting on betting exchanges where the layside may offer 5.4 and the back side may offer 4.9

(Not the same/disproportioned odds)

What this means is that if party B is getting 4/ 1 then party B must adjust his odds when compiling to incorporate a small percentage of profit for his/her book ( The over round )

This is where we need to convert the odds from fractions into percentages and then back to fractions again.

So let us say we have odds of 3/1

This tells us that there are 4 parts to this bet (3/1 is the same as 3+1 when betting)

Now what this tells us is that Party A has 3 chances in 4 of winning

And party B only has 1 chance in 4 of winning

Therefore if we convert these odds to percentages

Party A has a 75% chance of winning opposed to Party B who only has a 25% chance of winning)

Now to ensure the bookmaker or party A incorporates is over round or profit margin he must at least adjust his percentage to 76% this would give him a 1% Margin on the Spread or 76%/25%

So effectively odds of 3/1 will not be coupled with 1/ 3 when making the book. Instead the odds may appear more like this

Party B would use the odds of 2/7 instead of 1/3 because this will allow him a 77.52% profit ratio if he wins

And party B on the other side of the odds would be 3/1 allowing him a probability of 25% as a winning chance according to the odds on offer to him

As you can see Party A has incorporated this margin on just one horse if he did this in a ten horse race he would have created an over round of 25.2% this is made up of the odd 2.52% he has added to each selection by disproportioning the opposing odds

Therefore the definition of odds coupling is to disproportionate opposing odds from the layers side Party A.

Opposed to proportioned odds on the backers side /Party B

Stage 2

The Fractions

The Fractions are quite simply percentages and Decimals written in a different form

Again there are two sides to a bet

Party A.The Bookmaker/layer

Party B. The backer

If the odds were absolute or real, a table of odds would look something like this

Bookmaker Backer

1/3 3/1

75% chance of winning 25% chance of winning

In an odd’s on wager the tables would be the other way round

Bookmaker Backer

3/1 1/3

25% chance of winning 75% chance of winning

Stage 3

The percentages

The percentages are the same as Fractions and Decimals also written in a different form

Bookmaker Backer

75% chance of winning 25% chance of winning

1/3 3/1


Stage 4

The Decimals

Decimal odds are a simpler way of working out the odds and don’t give you a headache every time you want to place a bet.

Do you know the difference between 2/9 and 4/7?

No? Well, not many people do. But with decimals you’d know instantly.

So, how do decimal odds work? Well, if the decimal odds are 4.4 and you place a back bet of £10 and win, your total return is £10 x 4.4 = £44.(less any commissions that may be added by the betting exchange or bookmaker)

This is equivalent to a traditional price of 7/2

The key part to remember is that decimal odds always include the unit stake – thus every price you see on Betfair will be >1.


Fractional odds represent the profit – 5/1 means you will win five pounds for every one pound staked. And odds of 5/1 will shown as 5+1 the (unit stake) thus showing 6.0 as the equivalent odds

Likewise odds of 7/2 are calculated as follows 7 divided by 2=3.5 plus the unit stake >1 now equates to 4.5

So 7/2 is 3.5 + 1 which equals 4.5

This may take some time to come to terms with but in the meantime you can go to the “Betfair” website and use there odds converter tool absolutely free

You’ll be up to par in no time!

Also once you can calculate fractions to decimals it makes working out predicted percentage much easier


Odds of 5/2 are converted to percentages as follows

5 divided by 2 =2.5

Now divide into 100 (100%)

This equals 100/2.5 = 40

Therefore 5/2 represents a predicted 40% of that bet winning if the odds are absolute or real

Stage 5

The Probabilities

This is the biggest illusion when betting on horse racing


Firstly every horse in a race as some chance of winning

Therefore we must assume that all horses start off on a level playing field and thereafter a book is compiled by the odds compiler or bookmaker to create an in-balance

Some selections will be judged to have a greater chance and some to have a lesser chance of winning and therefore odds will fluctuate across the book

Shorter odds will be offered to selections that are deemed to be a better choice when predicting a winner

And longer odds for those expected to have less chance of winning

This is where the backer can obtain value in there betting!

Stage 6


Definition: Obtaining a better price from the odds on offer than are predicted to be correct

In simple terms if the odd on offer are 3/1 then it is predicted that the selection has a 25% chance of winning

But what if the absolute or real chance of winning was 40%

Then the odds should actually be 5/2

(5 divided by 2 =2.5) (100% divided by 2.5 =40%)

If this was the case you would achieve odds of 3/1 which would return 3 times the stake placed from a bet that should only be returning 2.5 times your stake at 5/2

Also you have got higher odds for a 40% probability of winning opposed to the odds compilers prediction being that the selection of 3/1 should only give a winning chance of 25%

So therefore in this case providing the selection goes on to win

You would have gained some value!

Stage 7

The Margins

When a backer chooses his or hers selections he/she usually does this by reading or studying various items of form

Or a system based on some criteria

Or a tipster

What he/she often fails to account for when placing bets are-

The over round/over broke/ profit margins that are incorporated in the odds on offer or the spread as it is known

The following articles and example will simplify the structure of the book to enable the understanding of absolute or real percentages of the “Book”

Stage 8

The predicted chance of success

A great way evaluate your predicted chance of achieving a winning outcome is to use the following rule.

The rule is-

“Whatever you think, think the opposite”

Example of this rule is as follows-

If you are offered odds of 3/1 or 4.0 this means that you have a 1 in 4 chance of success provided that the odds are absolute

This equates to you having a 25% chance of success.

Apply the rule and. Think the opposite!

This means you have a 75% chance of losing

(which does not include the over round margin or spread)

All of a sudden the bet does not look so appealing, this is where we have to use our own judgement based on fact, form and analysis to allow you to decide whether or not you think the chance of winning is greater than predicted, for that selection

Stage 9

Compiling and creating “the book”

As a bookmaker.A knowledge of percentages is vital and for many learning these numbers will become second nature

In order for a bookmaker to secure a profit from the book the percentages for all runners combined must together equate to a number greater than 100%

Occasionally a bookmaker will compile or adjust odds to make the book under round or over broke in order to attract business (All runners combined equal less than 100%)

In doing so he puts is book at risk of potentially making a loss

However in most circumstance the book is over round

Example of this is shown in the following race compilation-

This is taken from a real race from Friday October 7th 2011

Wolverhampton 18.10

The 32 RedPoker Median Auction Stake

Odds for each selection


Odds converted to percentage

True Odds all 9/1

True chance of winning

100% divide by 9+1=10%


Chelsea Mick


9/1 true odds

10% average chance of winning





Mr Fong






Hi There



Statement of Intent



Kings Future



Path Finder



The Cornish Cowboy






True totals are ten horses with and average 10% per horse equal to-


131% – 100% = 31% as the Over round or Spread or Profit Margin

Betting forecast- Evs Chelsea Mick, 3/1 Oblitereight, 13/2 Mr Fong, 7/1 Elmora, 10/1 Hi There, 12/1 Statementofintent, 25/1 King’s Future, 25/1 Path Finder, 25/1 Thecornishcowboy, 50/1 Tresabella

Thus- the over round here is 31% is achieved by the bookmaker for this race

In theory a backer who staked according to the percentage on every selection would stake 131 units. However whatever horse wins will only result in 100 units being returned. Therefore the bookmaker would make 31 units profit or 31%

This is generally how a book would look with an over round included in the Odds or prices!

Where I Play Blackjack in Las Vegas, NV and Why

Blackjack routinely offers the lowest house advantage over players as compared to all other casino games off the top. Players can enhance that inherent gambling advantage further by applying very accurate basic strategy play and insistence on playing only those games that offer player-favorable rules. There’s a plethora of variation between game rule-sets and table conditions and these directly affect the mathematical player expected value (EV) which ultimately translates to enhanced winnings / minimized losses over time. Proper game selection can easily reduce house advantage to.5% or less for the conscientious player who employs accurate basic strategy decision plays for a specific game and set of rules. Blackjack also provides one of the best venues to accrue comps for gamblers interested in playing the comp game; wise use of certain comp accrual tactics can increase real dollar value expectation and provide a means to keep losses to a minimum when including the values of potential awarded comps.

It’s impossible to overemphasize the importance of learning basic strategy for those interested in enhancing the value of their blackjack experiences. It’s the foundation of all efforts to beat the game for both novice and professional players. Basic strategy play is based on literally billions of computer simulated hands to arrive at proper hand play decisions regarding standing, hitting, doubling, and /or splitting pairs against a given dealer’s upcard. Those players who might be interested in becoming serious students or professional blackjack players will learn that further advancement in learning advantage play methods (eg card counting) is pointless without a solidly grasped knowledge of basic strategy. Memorization of specific basic strategy play is not difficult, especially for those who are interested in increasing their expectation at the blackjack table. As a new player in the process of learning these systems, basic strategy charts (specific for specific games and rule-sets) are available in countless books and on the internet; these are also available at most casino gift shops and or player’s clubs in Vegas. Using these at a live Vegas blackjack table is perfectly acceptable and common and is encouraged for novice players. With minimal time and effort at using and memorizing these basic strategy hand decision play charts, proper play will become second nature. Remember that there are some variations in given basic strategy play depending on the number of decks in play and the specific rules in force at a given table. There’s also a “generic” basic strategy chart that is utilized to cover all games and rules; this version is not as accurate as specific charts for specific games and conditions but is far superior to those proverbial “gut” play decisions. Keep in mind that use of perfect basic strategy play will not put players in a position to have an advantage over the house; the casinos will still have an edge over players in virtually all games except a few 3:2 payoff single deck games (which are beyond scarce in Vegas these days).

What are the blackjack rule sets / table conditions that enhance player expectation? I routinely play 6-deck (6D) shoe games that don’t utilize continuous shuffle machines (CSM’s) with $5 – $25 dollar minimum bet conditions. Keep in mind that games with higher minimums ( $25 and up) MIGHT have comparatively better rule sets for players than lower minimum tables; players should scope the better games out at all denomination minimums. The minimum rule sets / conditions (ultimately rendering a house edge between.25 and.42% off the top in 6D games and involving accurate basic strategy play) that I seek out in Vegas include..

Base games = 6D shoe games, $5 – $25 minimums, 1 – 12 bet spread variation (x minimums), 75% penetration, no CSM’s; 2D pitch games, $5 – $25 minimums, 1 – 6 bet spread, 60 – 65 % penetration.

Rules Lowering House Advantage / Increasing Player Expectation (EV) :

– Insist on 3 : 2 payoffs on naturals (blackjacks); adds + 2.5% EV; players cripple their blackjack expectation off the bat if they play tables with either 6 : 5 (there are tons of these in Vegas now, particularly 1D games) or even money payouts on naturals. One of the single biggest errors unknowing, average players make is electing to play these games if they’re concerned about value.

– DAS ( doubling bets allowed after pair splits ); adds + 0.14% to player expectation. There are plenty of games offering this rule in Las Vegas.

– S17 (dealer stands on all soft seventeen hands, eg A, 6 etc.); adds + 0.20% EV vs H17 games (dealer hits all soft seventeens); there are a few Vegas casinos who offer this rule, though most games are H17.

– LS (late surrender offered; allows player to surrender hand and half their original bet with certain 2-card totals against specific dealer upcards AFTER dealer checks for blackjack ); adds + 0.075 % EV. There are a very limited number of games in Vegas that offer this rule, but they’re locatable. Often this particular rule is not posted at tables so ask when you approach for play.

I don’t play 6D blackjack games in Las Vegas unless it offers all the above rules unless there is a specific set of other rules or promotions that drives the house edge down. Obviously, the above games are few and far between and you may consider this an anal approach…I just adhere to this axiom ( you don’t have to ). I agree that blackjack should be an enjoyable, “fun” experience; it’s simply neither of those for me if the house advantage off the top is insurmountable over time. I have found the above 6D rules / games with some consistency at the following Vegas casinos ( keep in mind that you may have to play $15 – $25 dollar minimums to collectively locate the above rules at a given table; additionally some of the properties may require these minimum bet levels for players to even get rated for table game comps, which can potentially add significant real dollar value to player expectation / EV) :


– MGM GRAND (Strip)




– RED ROCK (Off-strip)

Notice there are no Harrah’s properties on the above list. Be aware that there are changes to blackjack game rules with some regularity which requires players to seek out current info just prior to a trip and then scout and confirm derived information upon arrival. Excellent sources (modest subscription fee required) for blackjack game conditions in Vegas (and elsewhere) is Current Blackjack News (CBJN) or Trackjack. Be advised that the above 6D games are typically easier to find and play during the day on weekdays than on more crowded weekends. When conditions are more crowded for any reason, the better games are more difficult to find and obviously more difficult to find a seat at. Further, the casinos traditionally increase table minimum bet levels as demand increases and on evening shifts.

There are other additive rules ( in addition to and including S17,DAS, and LS rules) that some casinos offer that reduces their advantage and increases EV;

-RSA (resplitting of aces after initial split ); adds + 0.06 % EV; variations are RSA3 (resplit only once to make three hands) and/or RSA4 (split twice to make 4 hands total). The designation UR refers to unlimited resplits.

-D3 (player allowed to double down on first three cards ); adds + 0.23% EV.

Casinos that have recently offered S17, DAS, RSA, and LS (all at $25 dollar minimums or less) and house edge of.26% include;


– MGM GRAND (Strip)

– MIRAGE (Strip)


– RED ROCK (Off-strip)


– WYNN (Strip)

Two “sister” off-strip casinos that offer H17, DAS, D3, LS, RSA3, and UR with initial house edges of.25% are;



* Note that the current rules at the above two locales involve H17 (dealer hits soft seventeen); the cumulative advantage gained by including RSA3, D3, and UR more than offsets the H17 disadvantage (vs S17) to arrive at a playable house edge with accurate basic strategy play. It should be noted that the above two off – strip casinos offer exceedingly minimal glitz and glamour ( but they do offer decent blackjack rules and very low minimums. I like them both even though I realize Bruce Willis or Britney Spears won’t be there.

Other rules that can enhance player expectation but are seldom (if ever) found in Vegas casinos are;

– DSA (doubling after ace splits); adds + 0.10% EV

– 21S (suited blackjack pays 2:1 ); adds + 0.56% EV

– BJ2:1 (all naturals pay 2:1 ); adds + 2.28% EV

– 6 (player’s unbusted 6-card hand; automatic winner even against dealer blackjack); adds + 0.10%

– ES (early surrender allowed; allows player to surrender hand and half of original bet BEFORE dealer checks for their potential blackjack ); adds +0.63% EV; this rule hasn’t been offered for several years, beyond rare.

As mentioned earlier, more decks in play results in increased house advantage over players. Single – deck (1D) games in Vegas with reasonable rules and 3 : 2 payoffs are extremely rare these days and essentially nonexistent on the strip. In times past, a player could play even or have a slight edge over the house in 1D games with 3:2 payoffs, reasonable rules, and application of basic strategy. In Las Vegas presently, most 1D games offer 6 :5 payouts on naturals; you might as well ride up the Eiffel Tower at the Paris Hotel and toss cash off the observation deck. My most current info indicates there are 4 downtown (on Fremont street) casinos that offer single deck games with 3 : 2 payoffs;





The 1D games at the above downtown locations are all H17 but due to use of single decks ( though they usually only deal out about a half deck before reshuffling) the house edge for all these games is 0.18% and thus playable for a basic strategy player. As a sidenote, if any players employ any type of advantage play techniques (eg card counting, etc.) the pit and eye-in-the-sky surveillance crews may ask them to leave at these games (or any game, anywhere if they’re not adept at camouflage / disguising play). Just be aware. The El Cortez has been referred to as The Sweaty Spaniard for years and there’s a reason why.

There are some playable two-deck (2D) games in Vegas; simply playing a 2D game vs 6D adds.25% EV off the top. Theoretically a player can sacrifice some other rules as a tradeoff to arrive at a reasonable / playable house advantage range. A 2D game with base rules of S17 and DAS only provides a house edge of.19%; two strip locales where these games have been offered recently are;



*both have $25 minimums

Recently the following off-strip casinos offer 2D, H17,DAS, and RSA games for $2 -$10 minimums and a house edge of.35%;







Player expectation from blackjack play can be enhanced by taking advantage of short-term promotional games / buy-in incentives, blackjack matchplay or free ace coupon plays, and by employing comp accrual tactics. Info regarding blackjack promotions may be found in casino newsletters / mailers for players club members or on Las Vegas gambling info websites. Some occasional short-term blackjack promotions include 2:1 payoffs for naturals, payoffs on tied blackjacks (vs dealers; normally a push), increased payoffs for suited blackjacks (usually 2 :1 or 3 : 1 payoffs) or specific card combinations for player 21’s (eg 7-7-7 or 6-7-8). Blackjack matchplay coupons (usually 5,10,or 25$ denominations) are historically worthwhile to low-midlevel gamblers and usually valued at approximately 50% of face value for basic strategy players. Free ace coupons are also a valuable coupon to collect and use; player’s club ‘funbooks’ are available at many casinos and can reduce expenses (and thus add to EV ) if players put these to use. These coupon and funbook sources can significantly enhance EV particularly for low- moderate level gamblers. Contact me for some info regarding coupon / funbook sources if interested. Additionally, accruing comps at blackjack can at times mean the difference between winning vs losing sessions or trips depending on bankroll and wager levels. Signing up for player’s clubs and casino e-mail website subscriptions is a must for being able to obtain awarded comps. Specific tactics to employ at the tables include enhanced initial buy-ins (buying in for more than you intend to lose or gamble with), increased wagers when pit crews or floor people are watching / recording your gambling levels during actual play, and any number of methods that slow down the speed of the game and thus the number of hands / wagers per hour. Additionally, it’s suggested that players develop a relationship with a specific table host at specific casinos where they choose to play; often it’s good to select a host of the opposite gender in my opinion. At some casinos (usually not at Harrah’s properties), floor reps and pit bosses can award meal comps for table play. Developing a friendly, “ask-for” relationship with blackjack pit personnel and previously mentioned hosts can go a long way toward enhancing real-dollar value of player expectation when playing. Some of these casino staff members are people, too.

Any discussion of blackjack should at least address bankroll management elements. Play with money that won’t affect your daily life if you lose it. Staying too long at any table to recoup losses is both common and foolhardy. I seldom stay at a given table beyond 1 hour for several reasons; this time is extended only when experiencing a particularly good winning session or other important factors. There is a plethora of info regarding what’s known as Risk of Ruin (ROR) charts which outline betting ramps and bet levels with a defined starting bankroll. Some of these aspects are quite detailed and are usually restricted to use by serious, professional players. If players are interested in becoming a serious student of the game, there’s a massive amount of pertinent info on the web and within the pages of many books. Avail yourself of this info and over time you will be able to discern the credible info sources (there’s some misleading and inaccurate info out there, of course). For those interested, contact me and I’ll provide a decent info starter list.

The present economic downturn Las Vegas is enduring has resulted in a general trend of lower table minimums to a noticeable degree in several casinos. We could speculate that, in order to attract more patronage, the gaming entities might offer more short-term promotional games with player – favorable rule sets in addition to these observed lower table minimums. We’ll see.


Charles Higgins

Will Power And Self Discipline In Your Online Business

In your online business, there are quite a number of things that you have to master in order to be successful, but few can compare in importance to will-power and self-discipline. You are going to be tested in so many ways, while building your business that you are going to need these two qualities so important in your life almost every day. It is no good carrying on procrastinating and taking no action about different things that we all know are absolutely necessary in your online business.

So often you may want to do things that you know are beneficial and important for your business online yet, if you do not actually take action to get them done, you see that time carries on regardless and very little is achieved. This sort of thing happens to most of us, especially when we lack will power and have no self-discipline. So keep reading because I will cover a few ways to develop will power and acquire self-discipline.

I don’t want you to keep wishing you had will-power and self-discipline. Instead, I am going to show how to get these qualities to make a great difference in your life. When you start eliminating the habits that stop you from going forward, like laziness, excessive eating, smoking and procrastination, you will be on your way to recognize that you are getting more will power and self-discipline. Having more of these qualities is absolutely necessary to do well in your online business.

But how do you get will-power, how do you begin to understand will-power?. Well, if you think, like many people do, that will-power is something very arduous or difficult, or that you have to tense your body and brain to express it, you are mistaken. Don’t believe it because I am going to show some strategies that will convince you it is not difficult to develop will-power.

When you don’t value insignificant, unnecessary and unhealthy ideas, feelings, actions and reactions that don’t empower you, you are showing you posses will-power. This energy is stored inside you and can be available any time you need it to accomplish anything your want.

We will cover later some exercises you can do to gain a lot of will power, but now let us talk about self-discipline and why you need it for your life and your business. You could say that when you make decisions for your business and carry them through to fruition, you have some self-discipline because you have not allowed instant gratification and pleasure take you away from your desired course. Indeed that is a good definition of self-discipline because your actions allowed you to stay with the course that you selected before-hand.

Is this skill useful and required in everyone’s life? Absolutely! Without it, as we touched before, you would not stick with your decisions and would have a hard time achieving your goals in business. When you have it, your actions, thoughts and behaviour are in line with a better and more fulfilling life because your inner strength and will power overcome addictions, and other negative traits like procrastination, laziness and lack of focus, to allow you to achieve whatever you want to do in online business.

So why would you not develop self-discipline? You do know how useful and required it is for success in your personal life and of course in your business world too, so fortify it, embrace it and develop it further. Remember that lack of discipline may lead you to failure in reaching your goals. But on the other hand, actions described above that demonstrate you have self-discipline, leads to self-assurance, inner strength and self-regard, as well as to complete satisfaction and happiness.

There are lots of issues and challenges along the path of success, accomplishment and wealth in business and you want to rise above all of them to become successful in whatever you do. You want and need to have perseverance, persistence and sheer will power in order to also overcome other negative traits like smoking, drinking, eating disorders and other damaging habits like drug addition, procrastination and laziness.

Here is what self-discipline can do for you, in addition to those qualities mentioned above:

• It allows you to regulate and control anger, indecision, appetite and various other natural responses.

• You can eliminate many types of temptations which you do not need like gossiping or gambling, overeating or watching too much television.

• It can certainly rescue you from throwing in the towel when things are tough in the business world or in your personal life, by giving you the strength to keep going.

• With it you can get great relationships with others, by not feeling easily hurt or disturbed with what sometimes people do or say to you.

• It gives you better control over the need to accomplish the goals you set for yourself in your online business, as well as having total control over your responses, needs and thoughts.

There are so many more qualities that self-discipline can bring to you…

But how can you develop these inner qualities of will-power and self-discipline? Well, will-power can be obtained gradually and it all depends really on your desire to get it.

And you do not require huge monumental feats of effort to achieve it. Don’t believe those who tell you that to get will-power require you to go through great suffering or physical mutilation.

In fact, anyone can become powerful with will-power simply by the challenge of eliminating everything that you know is harmful for you in many areas of your personal and business life. By giving up adverse and useless things that take your time to make you weak, you gain in strength according to how many of these bad habits you can stop. Repeating this process is the challenge you need to make your life more absorbing, gratifying and interesting.

The will-power that you want is not something that can be achieved in one day. You can only developed it bit by bit, over a period of time and it is something that doesn’t depend on feelings, emotions, un-focus enthusiasm or even optimism. Instead this gradual ability, developed over a period of time, if it turns into a habit, it is something so special that you can use over and over again whenever and wherever you require it.

This training of the will-power extends or inter-relates with self-discipline since the taking of gradual steps to obtain will-power requires another great quality as we’ve covered before called self-discipline. So, carry on this way because with self-discipline you also get self-control which is another way of calling self-discipline.

Using self-control wisely is one of the most important tools you can have for self-improvement and for accomplishing success online.

What else does self-control do? It can do a lot of things really, like keeping under control any self-destructive, addictive, compulsive and obsessive action. It can enhance the sense of personal mastery and balance over your life. And it can remove any feelings of weakness and being too dependent on other people. It also enables you to take control over your life. And there are many other qualities that self-control brings to your life.

Self-control also has to act against many obstacles like truly understanding what self-control really is about; or about deficiencies of the desire to alter and improve. And it has to act against solid and uncontrolled emotional responses. Also, do not allow self-control to be considered a restricting and unpleasant activity.

How do you develop self-control? You first find out what areas of your life need more self-control and these could be: Drinking, Betting, Smoking, Obsessive behaviour, Eating and then attempt to identify emotions that lack control, like being angry, dissatisfied, sadness, resentment, delight or fearfulness. See if you can isolate the thoughts and emotions that push you to act in an unrestrained manner.

Here are a few exercises that you can do to gain will-power, self-discipline and self- control: A) Refrain from saying things that are offensive or negative to other groups of people. B) Overlook the gossip useless pages of newspapers. C) When you desire to eat unhealthy meals, discard the thought and prepare yourself an alternative healthy one. D) Try not to drink your tea with sugar for a week if you normally take sugar with your tea. E) Get up straight away at the set time to do it, instead of thinking about it. F) Develop the habit of finishing what you started.

But there are so many more things similar to those above to create an unstoppable muscle to develop your inner strength. The point here is that you do not want to continue making your life hard by doing the things you don’t like. Consider instead making your life ‘easy’ by doing the things that most people think hard to do. These skills are vital for your will-power, self-discipline, your personal life and your online business.

German Calvo