ACPA, thanks for posting this. It is always good to be reminded that you need to keep the great big gorilla off of your back.

Have a great holiday season.

Rose and Doc

So, if I understand this correctly, since your losses are only Sch A deductions and only no more than you claimed in wins, you could conceivably have a losing year but be required to report income and pay higher taxes. Is that right? Since sch A is not a 1:1 deduction from income, you would be reporting income but only allowed to claim a much lower deduction.

Can you clarify this? Am I correct in my assumptions?

Great topic, my question would be for what is considered valid documentation during an IRS audit or review. Would the IRS take into account your diary as evidence to off-set your wins? The W2-G is what the IRS sees as reported to them, so for what is considered valid supporting documentation, I would think the win/loss statement each casino issues would be better evidence to off-set the W2-G.

The second question I have is the un-comped expenses around a gambling / (Advantage Playier’s) Trip, Air/Fair, lodging, transportation and meals. Can these be used to off-set your win’s? And, while we are at it, how about itemizing the cost of books, seminar’s, practice tools and supplies?

-Mr PiP

MrPip,

Casino win/loss statements that I have seen wouldn’t do much for documentation.
The ones I have seen are usually just a net results although some of them show gross win and gross loses for the year.

I separate bank account for your W-2g helps if you use it just for gambling.

The strongest support is a dairy type listing of results each time you gamble.

Unless you are a professional gamble which is a whole other discussion your expenses are not deductible.

Noah

"ACPA" wrote: The question for me on another post reminded me that tax time is around the corner.

As I have posted in the past, every dollar you win in the casino or state gambling should be reported on your personal income tax return.

There haven’t been any significant tax issues resolved in 2016 so the rules are the same as in past years. A literal reading of the law would requires every win to be reported. So looking at a literal ruling on the following sequence of rolls (7-11-2-3-8-7) i.e. two come out winners followed by two crap loser and then a point 7 and assuming the only bets you make are a $10 pass line bet, where you replace the loss on a CO craps, you should report $10 winning and then and only, you itemize deductions you could deduct losses of $10. The itemized deduction is limited to no more than your reported winnings.

There has been a ruling by the IRS that allowed a gal who went to the casinos once a month, to determine her wins/losses each day and report as wins those days that were positive, instead of using each bet during the day.

You are suppose to keep track of your win/loss as they occur, i.e. keep a diary of your activity.

Why not just net it out and call it zero? It seems to me that reporting the $359 in winnings increases your AGI but the deduction does nothing to lower it, meaning you’re getting screwed on the medical deduction and anything else depending on the AGI. Not to mention in states like MI, you can’t deduct schedule A from your state return so you’re paying state income tax on the $359 when in reality you didn’t win anything.

In this last trip of mine I was in Vegas for four days and had daily results of two days of losses totaling $535 and had wins totaling $359. If that was my only gambling for the year, I would report wins of $359 and if I itemize deductions then deduct as a misc Sch A itemized deduction of $359. The additional $176 of my losses wouldn’t be deductible.

Noah

It didn’t post my reply:

Why not just net it out and call it zero?

By reporting the income you’re increasing your AGI but the deduction doesn’t lower it. That screws your over on the medical deduction, business expense deduction and anything else which is depending on the AGI,

In Michigan, the Schedule A is not deductible on the state return so you wind up paying state income tax on the $359 when in reality you didn’t win anything.

Since tax returns are on a year by year basis, I should be able to net it out and only report it if I have a win for the total year.

That was the essence of my question Rich. ACPA didn’t directly address it so I agree with you. That is what I do but I am very curious to see what the legal requirements are.

The legal requirement is you report gross winnings one spot on the return and gross losses at another spot.

And yes that gets you a different result than if you report only a net win at another.

I assure you if your wife received a W2-g or you got a W2-g got a 6 point fire bet win at Craps and reported less than the amount on those forms, you will likely be questioned about that.

Tax law is what it is, at times it doesn’t sound right, by unless the law is changed it is what it is.

I tried to find some of my old posts on this, but it looks like they may not still be available.

The IRS hasn’t been very aggressive in enforcing the gambling provisions of the law, but I don’t suggest you assume that will continue. It could change anytime.
Noah

Thanks for clarifying that ACPA. I wonder how many on here actually do that each year. I would guess not many.

I found what I was looking for on this site. In the area GTC Wisdom, there is a topic "It’s Tax Time". It’s on page three of the GTC Widom on my laptop, but you may have to page through the topics to find it.

If you have read that entire topic and still have questions, I’ll try to answer them.

The last two items from me in that post indicated what was contained on the Win/loss statements for each of the Tunica Casinos which ws where I played and makes some comments using numbers for the tax year when I wrote the post that is repeated in that topic. Current numbers are probably different but I think you can follow the concept.

The IRS approach that I mentioned earlier in this thread was issued after those old posts were made.

Noah

Following is a link to the post ACPA discussed above:

It’s Tax Time http://www.goldentouchcasino.net/forum/viewtopic.php?f=6&t=68

Skinny and ACPA. Thanks for the link. That was eye-opening reading. Kind of frustrating actually but it was good to read it and get better informed about this subject.