2006-11-30 17:34:34 · 7 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
To clarify: This question isn't for me, specifically. I'm asking on behalf of a friend who is involved in gambling (not excessively, but enough to warrant asking a question like this). I know that you have to report gambling wins over a certain amount, but I'm not sure how gambling debts can be treated (if, in fact, it is possible at all).
2006-11-30 18:36:30 · update #1
If you are not a professional gambler then you can write off gambling losses to the extent of gambling winnings that you report. The winnings go on page one of the return and the losses go on schedule A.
2006-11-30 23:44:59 · answer #1 · answered by waggy_33 6 · 2⤊ 0⤋
It may depend upon what state you live in and what game you're playing. In the state where I live, any lottery winnings over $500 (per winning) has to be taken to the main lottery claims office. I know this, because I won $1,000 several years ago in the Pick 3 game of our state lottery. The problem was that I played both games on the same lottery card...same numbers....same order. So, when I reported to the claims office, they gave me the $1000...but my state tax revenue office quickly sent me an IRS filing form at year's end, to report that $1000 on my year-end taxes. I was told by my tax accountant to save all "non-winning" lottery tickets for that year and I did. I was allowed to write-off the total dollar amount from all of those non-winning tickets against that $1,000. I have won lots more since that time, only now I'm smarter. I make out 1 card and have the store clerk run it through the machine 1x, 2xs, 3, etc. The highest winning dollar amount for the Pick 3 in my state is $500 per $1.00 bet, should you play the numbers "straight" and they come in the exact manner. I still keep a box of all non-winning state lottery tickets in case I would win a much larger sum of money at one time. I don't play the slots or visit casinos. I tried that several times over the years and money goes too quickly. I know of people in my hometown who have lost family, homes and cars and virtually everything. So, the casinos are off limits for me. I don't know if there is a way to track how much money goes down the drain at the casinos for tax write-offs, or even if you can write off casino debts. I'm definitely a cheap gambler (smile). Hope this helps!
2006-11-30 18:11:27 · answer #2 · answered by Wisconsin Deva 1 · 0⤊ 1⤋
As in the Groetzinger case, a taxpayer may be able to write off gambling debts if they can prove that gambling is their primary profession. Typically, gambling losses can be deducted to the extent of gambling winnings.
2006-11-30 17:54:11 · answer #3 · answered by Codynova 4 · 1⤊ 0⤋
Unless you are a professional gambler, losses are limited to the amount of winnings. The IRS is especially suspicious of losing lottery tickets and horse race tickets with shoe or sneaker prints on them as they indicate the gambler started picking losing tickets off the floor after he got a winning ticket.
2006-11-30 18:49:57 · answer #4 · answered by mattapan26 7 · 0⤊ 0⤋
Yes, but you must be careful to avoid an audit. If your gambing loss/debts far exceed your reported gambling wins, red flag goes up at IRS and you'll be a great candidate for an audit. It's very similar to waiters not reporting all of their tips. IRS can guestimate your typical tip should be for a particular type of restaurant you work for.
2006-11-30 17:43:12 · answer #5 · answered by lightpulse 4 · 0⤊ 2⤋
Only if you first file papers stating that you are a professional gambler and that is how you earn a living.
Otherwise it can't be considered a loss.
2006-11-30 17:36:43 · answer #6 · answered by Anonymous · 0⤊ 2⤋
Are you serious?
2006-11-30 18:24:49 · answer #7 · answered by Anonymous · 0⤊ 1⤋