Gamblers Lose Out (Literally) under the Big Beautiful Act

 Amid the fanfare surrounding the One Big Beautiful Bill Act, enacted on July 4, 2025, gambling enthusiasts and the gambling industry take a hit. Buried in the Act lies a modification that's stirring discontent among recreational bettors, professional players, and gaming industry leaders. This provision restricts gambling loss deductions to 90% of incurred losses, while maintaining the overall cap at the level of winnings. Applicable to tax periods beginning after December 31, 2025, it has the potential to transform neutral outcomes into tax liabilities and further erode already slim profit edges for those in the field.

Although the measure is expected to bring in more than $1 billion in additional funds over the next decade, it appears more like a fiscal shortcut than a balanced reform.

Decoding the Revised Guidelines: Shifting from Complete Neutralization to a Built-In 10% Penalty

Historically, tax regulations have treated gambling earnings as taxable, but permitting deductions for losses solely up to the winnings total when itemizing on Schedule A. This framework ensured that if outflows equaled or surpassed inflows, the inflows would not be taxed due to the resulting net break-even or economic loss.

The updated act introduces a 90% ceiling on allowable losses. Deductions are now confined to the smaller of winnings or 90% of verified losses (encompassing associated costs for career gamblers). Consequently, even in scenarios of break-even gambling, taxes could apply to 10% of earnings.

Take a weekend bettor with $20,000 in roulette victories but $20,000 in losses throughout the year. In the past, they'd offset the entire $20,000, resulting in no taxable betting income. Now, the maximum deduction is $18,000 (90% of setbacks), yielding $2,000 in taxable income despite no net gain. For a dedicated card player earning $400,000 from events but facing $440,000 in entry costs, lodging, and similar outlays, the allowable offset shrinks to $396,000, imposing taxes on $4,000 where previously none applied, even though the player was an overall net loser.

This adjustment isn't abstract; it heightens the fiscal strain in a pursuit where returns are frequently marginal. Career participants, whose operational costs, such as tournament fees and training, are now categorized under "betting setbacks," encounter amplified challenges since the restriction encompasses everything.

Practical Consequences: Affecting Card Rooms to Betting Lounges

The revision has ignited swift opposition, especially in states like Nevada where gaming sustains vast employment and contributes substantially to economic output. Sector experts fear it may discourage major players, diverting them to unlicensed international sites with minimal oversight and safeguards.

For occasional participants, the policy complicates an already burdensome tracking process. Numerous hobbyists skip itemizing due to elevated standard thresholds from earlier tax law changes, but those who do—typically affluent individuals with larger stakes—now have the motivation to misreport or bypass official avenues.

On the political front, the clause has forged unexpected coalitions. Lawmakers from Nevada have proposed measures, such as the Equitable Wagering Act, to overturn it, contending that it discriminates against betting relative to other sectors. Organizations representing the industry, despite endorsing the larger bill, are pushing for amendments, emphasizing the risks of underground operations.

Article Summary: Estate Planning with Cognitively Impaired Clients

The following is a summary, with additional commentary and analysis, of the article Estate Planning and Cognitive Impairment: Capacity, Ethics, and Risk Management, which was authored by Stefan Dunkelgrun and published in the June 2025 edition of Estate Planning Journal (WG&L). I read the articles so you don't have to! Of course, if the topic is of interest or more information is needed, you should consult the full article.

Overview

Cognitive conditions like Alzheimer’s don’t automatically disqualify someone from estate planning. Instead, the ability to make legal decisions hinges on a client’s understanding at the time of signing documents. Attorneys play a critical role in assessing this capacity, ensuring client wishes are honored, and protecting against disputes or undue influence. By leveraging thorough documentation and tools like video evidence, lawyers can create robust estate plans while addressing ethical obligations. This summary, of Stefan Dunkelgrun’s article distills essential insights and offers practical strategies for practitioners, enriched with commentary on balancing client autonomy and legal safeguards.

Core Insights

• Decision-Making Ability: Capacity is evaluated based on a client’s grasp of their actions when signing documents, not a medical diagnosis. For instance, someone with cognitive decline may still understand their will’s implications during a lucid moment.

• Ethical Balancing Act: Lawyers must honor a client’s valid intentions while guarding against coercion or incapacity. If harm is likely, protective steps are warranted, per ABA guidelines.

• Undue Influence Risks: Disputes often arise when someone pressures a vulnerable client, skewing their decisions. Courts look for signs like unusual changes to prior plans or a beneficiary’s excessive involvement.

• Litigation Prevention: Detailed records, independent legal advice, and clear client intent help shield plans from challenges. In some states, the burden may fall on the will’s proponent to disprove coercion.

• Medical Collaboration: Doctors’ insights on a client’s mental state are valuable but don’t determine legal capacity. Lawyers must assess decision-making ability directly.

• Video Evidence: Recording a client’s intent can bolster a plan’s validity but requires careful execution to avoid misinterpretation.

• Proactive Tools: Documents like powers of attorney or health care directives can prevent the need for court-ordered guardianship, preserving client control.

Video Evidence: Benefits and Challenges

Recording a client’s estate planning process can be a powerful tool, but it demands precision to be effective.

• Benefits:

  • Demonstrates Clarity: A video showing a client explaining their choices can confirm their understanding, strengthening the case for capacity.

  • Authentic Voice: Capturing the client’s own words offers direct evidence of intent, minimizing reliance on others’ accounts.

  • Dispute Defense: Clear footage can refute claims of manipulation or confusion, reinforcing the plan’s legitimacy.

• Challenges:

  • Risk of Misinterpretation: If others are present or the client appears frail, viewers might suspect coercion, even if none occurred.

  • Technical Pitfalls: Poor audio or visuals can weaken the recording’s impact, making it less persuasive in court.

  • Over-Reliance: Videos alone aren’t enough; they must complement other records to form a complete defense.

  • Client Comfort: Some clients may feel uneasy about being filmed, which could affect their demeanor. Consent and privacy are critical.

  • Risk of Unexpected Behavior: There is a risk of unexpected statements or behaviors that might work against a finding of capacity in a dispute. Deleting the recording, editing it, or re-recording with a re-execution of the documents creates problems in and of itself.

Practical Strategies for Attorneys

1. Evaluate Capacity Actively: Engage clients during clear-headed moments, asking them to describe assets or relationships to confirm comprehension.

2. Build a Robust Record: Note client discussions, reasons for choices, and any refusal of external input to show independent decision-making.

3. Counter Coercion Claims: Verify clients act independently, limit beneficiary involvement, and document helpful actions by family as supportive, not controlling.

4. Optimize Video Use: Secure consent, film in a neutral setting with clear audio, and pair with written notes for a comprehensive file.

5. Leverage Medical Input Judiciously: Use doctors’ observations to inform, not dictate, capacity assessments, focusing on legal standards.

6. Promote Forward-Thinking Tools: Advocate for powers of attorney and health care proxies to reduce reliance on invasive guardianship.

Perspective

Beyond technical strategies, estate planning with cognitive challenges requires a human-centered approach. Attorneys must act as both legal guides and advocates for dignity, ensuring clients’ voices are heard even as their capacities fluctuate. This dual role—upholding legal rigor while fostering trust—sets estate planning apart in these cases. By anticipating disputes and documenting intent with care, lawyers not only protect assets but also preserve a client’s legacy and peace of mind for their families.

POOF: FLORIDA'S SALES TAX ON COMMERCIAL LEASES IS NOW HISTORY

In a bold move to boost Florida’s business climate, Governor Ron DeSantis signed House Bill 7031 on June 30, 2025, abolishing the state’s sales tax on commercial property leases, often called the Business Rent Tax (BRT). Effective October 1, 2025, this repeal ends a tax that has weighed on Florida businesses for over five decades. This post dives into the tax’s history, the repeal’s details, its impact on tenants and landlords, and actionable steps for navigating the change.

The Business Rent Tax: A Historical Overview

Since 1969, Florida has been the only U.S. state to impose a statewide sales tax on commercial real estate leases, codified under section 212.031 of the Florida Statutes. This tax applied to rents for office spaces, retail shops, warehouses, self-storage units, and other real property. It covered not just base rent but also additional charges like common area maintenance fees, property taxes, or insurance passed through to tenants, significantly increasing costs for businesses.

The tax’s roots go back to 1949, when Florida began taxing certain property rentals. By the late 1960s, it expanded to cover commercial spaces.. The BRT generated roughly $900 million annually for the state, but it made Florida less competitive, as no other state had a comparable tax. Over time, pressure from businesses led to gradual reductions. By June 1, 2024, the state rate had dropped to 2%, with county-level surtaxes (0.5% to 2%) bringing the total to 2.5%–4% in most areas. Despite these cuts, the tax remained a hurdle for businesses, especially those operating across state lines.

Repeal Details: Scope, Timing, and Legislation

House Bill 7031, enacted on June 30, 2025, eliminates section 212.031, Florida Statutes, removing the state’s 2% sales tax and local surtaxes on commercial leases starting October 1, 2025. This repeal erases the combined 2.5%–3.5% tax rate applied in most counties. For instance, a business paying $15,000 monthly in rent at a 3% tax rate will save $5,400 per year, unlocking funds for expansion or other priorities.

The tax exemption applies to rent for occupancy periods beginning on or after October 1, 2025. Prepayments for October or later made before this date are tax-free, but payments for earlier periods (e.g., overdue September rent paid in October) remain taxable. The repeal does not affect taxes on short-term residential rentals (six months or less), boat docks, parking lots, or aircraft hangars, which fall under other statutes.

Included in Florida’s $115.1 billion fiscal year 2026 budget, the repeal is expected to save businesses $2.5 billion annually, making it one of the state’s most significant tax cuts since the 2006 intangibles tax elimination. It reflects Florida’s push to reduce business costs while maintaining its low-tax reputation.

Impacts and Insights

• Boost for Businesses: Industry groups like the National Federation of Independent Businesses and real estate advocates estimate the repeal could generate $20 billion in economic activity and create tens of thousands of jobs over the next few years. Lower lease costs make Florida more attractive for startups, retailers, and corporations. Compare this to the imposition or threat of imposition of new or additional business taxes in other states.
• Level Playing Field: By removing a tax unique to Florida, the state aligns with competitors, simplifying lease negotiations for businesses operating in multiple states and reducing compliance complexities.
• Streamlined Operations: Landlords benefit from simplified billing, as they no longer need to collect or remit sales tax on leases after September 30, 2025, cutting administrative costs and risks of errors.

Challenges to address include:

• Transition Complexity: Businesses must adjust accounting systems to stop charging tax for post-September 30 occupancy. Past compliance remains subject to audits by the Florida Department of Revenue, requiring robust recordkeeping.
• Budget Considerations: The state’s loss of $900 million in annual revenue has sparked discussions about future fiscal strategies, though tourism-related taxes help offset the impact.

Practical Steps for Tenants, Landlords, and Advisors

To capitalize on the repeal and ensure compliance, stakeholders should act strategically:

• Tenants:
  • Check lease terms to confirm tax charges cease for October 2025 occupancy. Inform subtenants to avoid overbilling.
  • Keep records for pre-repeal periods, as audits may target historical tax filings for up to three years.
• Landlords and Property Managers:
  • Revise billing systems, lease software, and payment processes by October 1, 2025, to eliminate sales tax charges. A simple tenant notice can clarify the change.
  • Close sales tax accounts with the Florida Department of Revenue if no other taxable activities apply.
  • Add clauses in new leases to address potential future tax reinstatement, protecting against policy shifts.
• Tax Professionals:
  • Guide clients through the transition, ensuring accurate reporting for pre-repeal periods and clarity on occupancy-based tax rules.
  • Stay updated on Florida Department of Revenue guidance, expected before October 2025, for compliance details.
  • Support clients in audits for prior BRT payments, drawing on expertise from firms specializing in Florida tax disputes.

Moving Forward

The elimination of Florida’s Business Rent Tax is a pivotal step toward a more competitive business environment, easing financial and administrative burdens for tenants and landlords. By acting now to update systems, review contracts, and prepare for potential audits, businesses can fully harness this tax relief. The repeal strengthens Florida’s position as a top destination for commerce, promising long-term economic benefits.

Sources: Florida House Bill 7031, signed June 30, 2025; Greenberg Traurig, “Florida Legislature Repeals Sales Tax on Commercial Leases,” June 22, 2025; National Law Review, “Florida Ends Business Rent Tax Effective in October 2025,” June 16, 2025; RSM US, “Florida budget eliminates business rent tax,” July 1, 2025; Moffa Tax Law, “Florida to End Sales Tax on Commercial Rent,” June 17, 2025; Florida Realtors, “Florida Eliminates Burdensome Business Rent Tax,” June 30, 2025.