deducting losses

[fishyak]

I have a 1099 this year for gambling winnings. I called the IRS and asked if I could offset my wife's slot losses documented by a statement from the casino. Answer: Yes, because it is a joint tax return. But the losses taken CANNOT exceed the winnings. And, unless you are a professional gambler, you cannot write off expenses.

As for your "undeclared" winnings, I suggest that for your own safety you quickly STFU.

[Niediam]

[ QUOTE ]
[ QUOTE ]
Your winnings are 4k so you could deduct up to 4k.


[/ QUOTE ]

so you are saying you would be declaring 4k in winnings and 4k in losses. so the best they can do is offset the winnings?

if that's true though, then i wouldn't even bother mentioning gambling at all if i had a loss of 1k for the year.

[/ QUOTE ]

I'm not trying to be all preachy... but atleast realize that you are committing tax fraud by not reporting the income.

[SheridanCat]

[ QUOTE ]
[ QUOTE ]


if that's true though, then i wouldn't even bother mentioning gambling at all if i had a loss of 1k for the year.

[/ QUOTE ]

I'm not trying to be all preachy... but atleast realize that you are committing tax fraud by not reporting the income.

[/ QUOTE ]

Am I misunderstanding the OP? If he had a loss for the year of $1,000, how would it be tax fraud to not declare it. Where would you declare a loss you can't deduct? And why would you need to?

Also, I'm not a tax professional - obviously.

[Niediam]

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]


if that's true though, then i wouldn't even bother mentioning gambling at all if i had a loss of 1k for the year.

[/ QUOTE ]

I'm not trying to be all preachy... but atleast realize that you are committing tax fraud by not reporting the income.

[/ QUOTE ]

Am I misunderstanding the OP? If he had a loss for the year of $1,000, how would it be tax fraud to not declare it. Where would you declare a loss you can't deduct? And why would you need to?

Also, I'm not a tax professional - obviously.

[/ QUOTE ]

I read OPs post to read that because he was allowed to deduct the total of his wins that he wasn't going to declare any winnings.

[ottsville]

[ QUOTE ]
[ QUOTE ]
Am I misunderstanding the OP? If he had a loss for the year of $1,000, how would it be tax fraud to not declare it. Where would you declare a loss you can't deduct? And why would you need to?


[/ QUOTE ] I read OPs post to read that because he was allowed to deduct the total of his wins that he wasn't going to declare any winnings.


[/ QUOTE ]

The issue is in not declaring the "winnings" even if the overall year was a wash/loss. As "misc income" he can't deduct the extra $1k in loss, but he still is required to report the $4k wins and $4k losses.

Unless you are filing as a professional player the most you can do is offset your winnings. If you are file as a pro, you can use gambling losses that exceed yor winnings as deductions against other sources of income.

disclaimer: I'm not a tax pro either, YMMV, etc.

[Kurn, son of Mogh]

The total of your winning sessions are reported on Form 1040 in the *other income* section.

Losses are reported as an itemized deduction for Schedule A.

If your winning sessions were $4,000, you report $4,000 in income. If your losing sessions totaled $5,000, you can only deduct $4,000 in losses.

Remember, IRS pub.529 specifically forbids reporting the net of gambling wins and losses as income.

If you are audited (which unless you make over $100,000 in total income or most of your income is not W-2 income is quite unlikely), you just need to bring a copy of whatever records you kept.

Even if you live in one of the few US jurisdictions where online gambling is illegal, that's irrelevant to the IRS. Their job is just to collect money.

[joecash]

[ QUOTE ]
The total of your winning sessions are reported on Form 1040 in the *other income* section.

Losses are reported as an itemized deduction for Schedule A.

If your winning sessions were $4,000, you report $4,000 in income. If your losing sessions totaled $5,000, you can only deduct $4,000 in losses.

Remember, IRS pub.529 specifically forbids reporting the net of gambling wins and losses as income.

If you are audited (which unless you make over $100,000 in total income or most of your income is not W-2 income is quite unlikely), you just need to bring a copy of whatever records you kept.

Even if you live in one of the few US jurisdictions where online gambling is illegal, that's irrelevant to the IRS. Their job is just to collect money.

[/ QUOTE ]

ok, this makes sense mostly. but are you saying if i profit 1k from gambling in a year, i can't just declare 1k as gambing income? and if i lose 1k, i can't just not report anything?

the whole idea of a "session" seems pretty arbitrary to me. why can't i just call the whole tax year one session.

also, suppose i only play live poker say just a few times in a year and don't keep records. at what point are you not a recreationl gambler? seems like a lot of gray areas here.

[fishyak]

As I understand it, if you win 5 and lose 4 you report it as $5,000 income and $4,000 losses, not net $1,000. The prior post does cite the right reading material, Publication 529. The Publication isn't real clear either, and TurboTax doesn't have much on the subject. I know that the reason you are not supposed to just net your income out is that your losses go on your Schedule A and it isn't always the case that all items on your Schedule A will fully offset income elsewhere.

It's a real pain in the butt. For official advice, work with a pro, enrolled agents are OK, too. Hopefully, you can find someone with experience in this area.