Very strange Crypto Tax situation, looking for guidance.

Hello,

Because Crypto is such an insane place to make money fast for basically nothing, obviously the IRS has implemented a lot of laws and cracked down on audits. I'm trying to avoid being overly taxed and making sure I'm doing things right. But now every where you look, there's a crypto tax lawyer website with a minimum fee of $295 just to explain your situation and see if you even need to take it to the heights of one of these tax professionals. It's complete bullshit.

So here's what I have going on and hopefully someone can shed some light on this for me. I have a friend who gambles a lot on Bovada.com. To my understanding, it's online slots and poker and they're able to make a lot of money in one day. One of their withdrawal methods for winnings, is Bitcoin. They can do as many bitcoin withdrawals as they want per day up to 100k or something to that effect. But if they want to do a straight cash voucher to venmo or paypal...they can only do 4000 per day and within 24 hours.

They have been nice enough to basically include me in these winnings by me sending them an amount of money and they double or triple it. I'm not going to get into the specific amounts. But just as an example. I send them $500 USD, they gamble with it, make money on it and send me back $1000 USD in Bitcoin to my Coinbase. Which I then sell and get my money back plus more.

It's worked out great, I have my car paid off. They offered to continue letting me do this but I told them I'd like to hold off as tax season is coming up and this extra income has basically pushed me into the next tax bracket and I'm used to getting a tax return. Not oweing one.

When filtering your transactions in coinbase under taxes, you can label them as gifts. Which that's what I've been doing because technically...that's what this is right? I'm not paying for the crypto and neither is he. He's transferring it to me from Bovada. Which should not be taxable to me. But me selling it, is a taxable event. So am I answering my own question or am I missing something? Am I going to get taxed at a 100% rate because of this short term gain? Any input would be greatly appreciated. Thanks.