TAXES: 1099-MISC. How do I deduct entry fee

[Paboo]

Played in a couple tournaments at Harrah's in New Orleans in 2005. Just received a 1099-MISC in the mail for my $3000 in winnings. Was really surprise I didn't get a W-2G.. just this 1099-MISC.

I'm using turbo-tax online and it was easy to enter this amount in as 'earnings', but for the life of me I can't find out where I can deduct the entry fees I paid for this and other tournaments I played last year?

1. What form should I use?

2. They also took some state tax out... I heard that I may be entitled to that back. Am I entitled? If so.. what form do I fill out for that?

Thanks,
Paboo (Florida)

[talou]

I'd guess that you'd need to file a Louisiana State income tax return to try to get a refund.

[Niediam]

You need to itemize your deductions.

[broiler]

This is not completely correct. You need to itemize in order to deduct the losses from tournaments in which you do not cash.

When you get a W-2G for the gross amount you are allowed a deduction from other income for the cost of the wager required to win that amount. Therefore, you would report the amount from the W-2G (so that the IRS can match the number) and then on a separate line have a negative amount for the cost of the wagers for only the tournament entry fees that yielded the gross amount reported.

TC Memo 2002-89 has a very good example of a court using this deduction method for taxpayers who failed to report any amount from multiple W-2Gs. The same case also has a good example of a negligence penalty being added for failure to keep adequate records, where ignorance of the law was not deemed acceptable.

[Paboo]

Call me an idiot... but what form do I use to itemize my deductions?

I imagine this a line-item form. Should I be very specific in entry?

EX.
$1060 - Harrah's Poker Tournament entry fee (04/1/2006) - (RE: 1099-MISC)

[Paboo]

Thank you for your reply.

I didn't get a W-2G... Really wondering why I got 1099-MISC instead?

If I had gotten a W-2G, I think filing would be pretty straight forward... I need to know if filing is the same for 1099-MISC then?

[broiler]

Many places use the 1099-MISC and W-2G as the same thing. I have seen a casino run out of W-2Gs and grab a stack of 1099s just so that they could issue something. It isn't totally correct, but it keeps with the spirit of reporting the income.

I completely forgot the you mentioned the 1099 in your original post since I reread the case that I references and had W-2G stuck in my head. You should report the income exactly as I described because your winnings were reported to you as a gross figure.

The losses from tournaments in which you did not cash would be entered on Schedule A as gambling losses, since I saw that you asked where it would end up in another post.