Jicola

Write off your losses

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Topic Number: 419 - Gambling Income and Losses

The following rules apply to casual gamblers who aren't in the trade or business of gambling. Gambling winnings are fully taxable and you must report the income on your tax return. Gambling income includes but isn't limited to winnings from lotteries, raffles, horse races, and casinos. It includes cash winnings and the fair market value of prizes, such as cars and trips.

 

 

This is something I’m very familiar with

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Yes that quote is correct in Gambling Income as you stated, however you didn't include the losses part of that quote. You can write off your losses up to your amount of report-able winnings.  Getting a hand pay and reporting your winnings off of the W2G the casino issues to you and sends a copy to the IRS actually gives you an opportunity to reduce your taxable income by using your losses to offset your winnings. I have found online tax programs such as Turbo Tax don't handle your losses versus your winnings so you should do it by hand on the proper forms or pay someone to itemize for you.  I use H&R Block.

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I thought I saw someone on YouTube win $98.5K in 24 handpays, but he walked away $3K down. How do you tell the IRS you lost $101.5K at the same time you won $98.5K? I mean, the machines took it all and it's just on slot machine voucher paper that's gone.

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