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Can you write off online casino/gambling losses on your taxes?

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Can you write off online casino/gambling losses on your taxes?

a friend of mine asked me this question and I admit I dont know – I know you can write off legal losses like from vegas and stuff – and Im sure the tax man wants to you report any winnings from any place that may be illegal and they wont complain if they are getting money, but do they allow you do deduct losses from online if you have the documents to prove it ??

or can you not do that since technically I think your not supposed to be doing any type of gambling online didnt the govt technically bann it ?

Thanks:)

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7 Responses

1. admin Says:
   August 31st, 2009 at 7:40 pm
   You can deduct gambling losses only if you itemize your deductions on Schedule A of the Form 1040. The deduction would have to go down as a miscellaneous deduction. To deduct your losses, you must be able to provide receipts, tickets, statements or other records that show the amount of both your winnings and losses. But here's the thing, you cannot claim gambling losses that were more than the gambling income you report on your return. So say you won $5000, which would have to be reported as income. But say you lost $8000. You can't report a loss of more than the $5000 you won. Another scenario, you won $500, but lost $3000. Guess how much you can write off? Right $500. So you see, you just can't report a gambling loss of whatever amount, especially if you haven't won at least the same amount.
2. admin Says:
   August 31st, 2009 at 7:40 pm
   Yes, you can write off gambling losses. You must ALSO claim as income any gambling WINNINGS.

   You claim the losses (and winnings) on the Schedule A (Itemized Deductions) and must file a form 1040 (not 1040A or EZ) in order to itemize deductions, and you must have more deductions (total) than the standard deduction–which for a single person is $5,450.

   So your TOTAL itemized deductions must be more than $5,450, and you claim the gambling losses as a "miscellaneous" deduction.

   If you win and need to claim winnings, the gambling establishment will issue you a form that states how much it was.

   Here's info:

   http://www.irs.gov/taxtopics/tc419.html

3. admin Says:
   August 31st, 2009 at 7:40 pm
   Maybe. IF you itemize you can deduct gambling losses up to the amount of your gambling winnings, which you report. You can only take the deduction if you have kept all the required records, including a detailed log of all of your gambling activity for the year. Slips showing losses are not sufficient documentation. Neither are a box of losing lottery tickets.
4. admin Says:
   August 31st, 2009 at 7:40 pm
   From any sort of gambling, you can only deduct losses to the extent of your winnings; which, of course, makes gambling income a wash if you are a loser; that is why people pick up betting slips off the racetrack floor. but, it you win more than you lose, you must report the gains. Don't you love our taxing Government?
5. admin Says:
   August 31st, 2009 at 7:40 pm
   Expenses from an illegal activity are not deductible.

   However, income from an illegal activity is included in your gross income.

6. admin Says:
   August 31st, 2009 at 7:40 pm
   to the best of my limited tax knowledge….you can write off loses only against winnings you pay tax on ….. if you won 10,000, you can only write off losses up to 10,000…but i am not an expert here
7. admin Says:
   August 31st, 2009 at 7:40 pm
   If your friend doesn't gamble for a living they can claim any loss up to the amount of their winning, but they have to report all their winning and have a log showing when an how much they gambled and their win and loss for each session.

   Also if you won even if the winnings are from illegal gambling you MUST report that as income.

   If you friend does have winning that are reported to the IRS, ie a jackpot or winning where they would send out a w2g or a 1099 and plays with a casino club card or some type (a rewards cards etc) then they can request a printout of their play and can use that in place of a log to show wins and losses, but it's much better to keep your own log.

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