Deducting Hobby Expenses

[AAAA]

if you are building a home from scratch or making monumental labor improvements to an existing one, you are not required to deduct a substantial home office deduction.

A deduction certainly isn't worth a credit!

[Holden97]

I'm not sure what credit you are referring to.

[Holden97]

What do you mean by 'required'?

[AAAA]

you are right. the $250,000 tax free is only about the same as a $75,000 tax credit at the 30% or so tax cost. I misspoke.

[AAAA]

IRS isn't going to require that you claim an office deduction if you work at home. Many do not take one.

[Holden97]

I agree that it is pretty unlikely of the IRS to require a deduction. Not taking a deduction was such a departure from all of your other tax related posts that I thought you might've meant something else.

[Mr.K]

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itemized losses (improved on standard deduction)

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if by this you mean you added your losses to the standard deduction, try again. The losses you mentioned do not increase your standard deduction. In fact they are not enough to give you any benefit at all.

You just get the standard deduction so that in effect, you are paying on your entire $2700 and $1500 and do not get to deduct any of your losses.

This is why there is so much moaning on the whole topic.

The good news is that you might be able to deduct some of your books off your winnings without having to put them in the Schedule A where you would put your losses. I am not positive, but i think you might also be able to deduct some tourney entry fees off your gross wins.

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AAAA, you seize on something interesting here for small stakes players: if a player has gross wins of $X, and gross losses of $Y, and $Y < standard deduction, then the player is correct to report his gross wins on line 21 and not itemize his losses, but rather take the standard deduction. As far as poker goes, the player would simply be paying tax on $X.

Or did I goof on something here?

[AAAA]

yup...you pay tax on all the wins and deduct none of the losses. IRS feels the amount for your standard deduction includes an allowance for gambling losses.

[SumZero]

Good thinking, I'll have to remember that for next year. (I'm not sure it is worth my trouble for filing an amended return - although it will be good fodder if audited).

I did the gambling winnings on line 21, gambling loses on Schedule A thing and live in California where state taxes make itemizing worthwhile even without gambling.

[fep]

I did a internet search and found this:

Gambling expenses, if you are a hobby, are treated different from any other hobby. Non-professional gamblers are not allowed to deduct expenses for transportation, meals, lodging, etc. You can only offset your income with the money you lose.