[ITSTIMETOPASS]

So if we need to report the gambling income in Other Income and, if we itemize, we can only deduct gambling losses up to the winnings that we reported and still be subject to only above 2% so we’re technically still paying taxes on a little bit of the gambling income that we reported, right? Or am I understanding this wrong?

Also, your gambling loss deduction that you take has to be whatever you reported in Other Income or less than that amount correct? It would never be more otherwise a flag would go off in the IRS, right?

AUD: PASSED!
REG: Q4 2015
FAR:
BEC:

[Alex]

gambling losses are not subject to the 2% floor

REG-74, 76
AUD-09/08/16
FAR-TBD
BEC-TBD

[ITSTIMETOPASS]

But then technically you're just deducting what you added to income. So report that the gambling winnings are income and then deduct the gambling losses up to the winnings. So it literally is just the technicality of having to report it right?

AUD: PASSED!
REG: Q4 2015
FAR:
BEC:

[Spartans92]

pretty much ^^

BEC- PASS

[taxgeek83]

As long as you itemize your deductions, the income and losses will offset each other. And yes, don't deduct gambling losses in excess of gambling winnings, lest the IRS send you a fun-filled letter. Though some folks will claim to be “professional gamblers” and try to get large gambling loss deductions out of it. Look up a few tax court cases along those lines if you ever have time. They're interesting….

[Alex]

Don't forget you have to have documentation for the gambling losses. You can't simply put the amount of gambling winnings.

REG-74, 76
AUD-09/08/16
FAR-TBD
BEC-TBD

[Nancy]

All you really need to know for Reg is that you can deduct any gambling income UP TO the amount of loss. Ex: you have $600 gambling winnings and $300 losses, you can deduct $300 on your schedule A in the other itemized deduction section. So yes anything above the gambling losses is reported in your income. BUT say you had $600 losses and only $100 winnings…in this case you can only deduct $100 on schedule A.

For I can do everything through Christ, who gives me strength.
Philippians 4:13

[Author]

Replies