Certain behavior—or lack of it—can raise red flags for the IRS and result in an audit. You take all of your winning sessions for the year, add them together, and you come up with a result. For bingo and slot machine winnings, the. Wayne Greene 918-581-8308. Poker tournament winnings is of $5,000 or more. In conclusion, gambling losses can be deductible on your federal tax return, but only up to the amount of your winnings. The IRS and judges get suspicious if the amount of gambling income reported by a taxpayer exactly matches the total amount of gambling income reported on Form W-2Gs. Gambling losses were simultaneously spared, strengthened, and neutered under the TCJA. If you itemize, you can deduct $400 for your losses, but your winnings and losses must be handled separately on your tax return. Enter your winnings in the Form W-2G topic or as Other Income. Gambling losses. 7 million individual returns with gambling winnings on a Schedule 1, with a total gambling income of $28. 23% personal income tax rate to the state of Indiana. Avoid Audit Risks and Red Flags. Income tax is withheld at a flat 24% rate from gambling winnings more than $5,000 from: Any sweepstakes, wagering pool, including payments made to winners of poker tournaments, or lottery. While you are permitted to deduct gambling losses up to the amount of your winnings, doing so could lead to an audit. You should show your gambling winnings as income and then your gambling losses as an itemized deduction, if you qualify. In case you haven’t heard, the IRS takes a hard line on gambling income. Must itemize: Taxpayers can only deduct gambling losses and expenses if they itemize their deductions on Schedule A in Form 1040 Taxpayers will need to have more expenses than the standard deduction to itemize; for tax year 2022, the minimum is $12,950 for single filers and $25,900 for married couples filing jointly. A taxpayer who has $50,000 of gambling winnings and $50,000 of gambling losses in Wisconsin for a tax year, for example, must pay Wisconsin income tax on the $50,000 of gambling winnings despite. Also, the amount of losses you deduct cannot exceed the. Upon audit, the Commissioner of Internal Revenue determined that respondent's $70,000 in gambling winnings were to be included in his gross income and that, pursuant to § 165(d) of the Code, 26 U. Then, you may utilise this record to demonstrate that you had specific losses or. Note, under the new tax reform law, the gambling loss limitation was modified. If you itemize your deductions, you can write off your gambling losses for the year on line 27, Schedule A (Form 1040). First, you may deduct gambling losses only if you itemize deductions, which Erb said is only a third of tax filers. In reality, many gamblers choose to re-wager or “recycle” their gambling winnings for future bets. Individual income. Turbotax filing losses casino. State taxes on gambling winnings range from 3% to as high as 10%. My guess, and it is only a guess, is that a detailed log without machine numbers would be. But the higher the income reported, the higher the odds of an. The general IRS advice on this topic can be found. If. For example, a taxpayer that wins $10,000 from a spin of the roulette may immediately go on. Since the IRS gets copies of all the 1099s and W-2s you receive, failing to report income on your tax return may be Number. The IRS levies a 25 percent gambling winnings tax on more than $5,000 in winnings from slots, keno, and lottery games. Learn more about the treatment of gambling tax and gaming losses. Your log should state the date and type of gambling activity, the name and address of the places where your gambled. Are casino jackpots taxable in california, irs gambling losses audit. This means that this gambler could face tax liability for up to $500,000. Casual/Amateur Gambler. At the end of the day, it’s your responsibility to report any winnings. We would like to show you a description here but the site won’t allow us. The Internal Revenue Service is always on the lookout for sources of taxation. While you are permitted to deduct gambling losses up to the amount of your winnings, doing so could lead to an audit. Essentially, the winnings are taxed at the same rate that additional wages would have been taxed. While you are permitted to deduct gambling losses up to the amount of your winnings, doing so could lead to an audit. The IRS and judges get suspicious if the amount of gambling income reported by a taxpayer exactly matches the total amount of gambling income reported on Form W-2Gs. Enter your winnings in the Form W-2G topic or as Other Income. You're supposed to do this by keeping detailed. If you open an app and it shows a ledger of $30,000 winnings, $28,000 bets wagered, Win/Loss $2000, the IRS needs the $30,000 number. Nonprofessional gamblers who fail to itemize deductions lose the tax benefit of. For example, if a $30 bet at the race track turns into a $110 win, you’ve. The amount of. These red flags are not limited to a certain event. Thus, the IRS will request to examine your income more closely. to 5 p. You’re allowed to deduct losses on Schedule A up to the amount of your winnings, but the IRS knows that many taxpayers don’t keep the required records. But if you file a Schedule C to report profit or loss from a business. Statements. Use the Session Method! The IRS allows taxpayers to report all gambling winnings on a “per session” basis. 162 (a) allowed a deduction for all ordinary and necessary expenses paid or incurred in carrying on a trade or business. Bookmark. (3:06) How GSG can help. Generally, a taxpayer must file a Report of Foreign Bank and Financial Accounts (FBAR) if the aggregate value of assets in foreign bank accounts exceeded $10,000 during the prior year. If you find. Losses must be reported to the IRS, just like your winnings. Conclusion. While gambling “income” sounds like it pertains strictly to cash winnings, it also applies to non-cash profits – such as cars and trips – and the cash value of those items need to be reported as income on your tax return as well. Information You'll Need. Name and address or location of gambling establishment; 3. The IRS allows you, the taxpayer, to deduct your gambling losses up to the amount of your gambling winnings. Overall, reporting gambling losses on your federal income tax return requires accurate record-keeping, itemizing deductions on Schedule A (Form 1040), and reporting all gambling winnings on your tax return. The IRS levies an 0. C. Being proactive and organized can also help minimize the risk of an audit and ensure that you are prepared should one occur. OVERVIEW Gambling losses are indeed tax deductible, but only to the extent of your winnings. When determining how much to report on your income tax return, bettors must add up the total amount of their winnings, which gives you your total gambling winnings. Fortunately, you do not necessarily have to pay taxes on all your winnings. i keep a daily log of my gambling's win/loss for each machine i play in an excel spreadsheet on my phone. RJS Law represents clients throughout California. may just trigger a letter and bill from the IRS — or it could. If you itemize your deductions, you can deduct your gambling losses for the year on Schedule A. The IRS reinforced this position in a recent private letter ruling. What Casual Gamblers Need to Know. 4. $45,000 in gambling winnings, deducted $45,000 for gambling losses, and claimed a $603,000 casualty loss for “Investment Portfolio and Home. The internal revenue service generally requires that you report your gambling winnings and losses separately when you file your taxes rather than combining. We would like to show you a description here but the site won’t allow us. Taxpayers can deduct gambling losses if they meet certain criteria. While card pulling doesn't work as well as it used to, on games such as Ultimate X, it works really well. You can deduct gambling losses, but only up to the amount of your. Not only do great records help you when tax time comes each year, but you’ll also have proof for your claims if you ever have to go through a tax audit. The IRS limits gambling losses up to the extent of gambling winnings included on your tax return. ”. Since this is one of the few advantageous tax positions for gamblers, it is important to capitalize on it. A Form W-2G must be used by gambling establishments in the certain situations in order to record your winnings: Bingo or slot machine winnings of at least $1,200. Retirees don't completely escape the IRS audit machine. The tax preparer found a man with an extremely large collection of losing lottery tickets and made a deal: he would borrow 200,000 losing tickets for a month for $500. Are casino jackpots taxable in. The IRS allows gambling losses to be deducted, so long as a gambler itemizes the deductions. The full winnings were supposed to be reported as other income. Your gambling losses, no greater than winnings, get reported on Schedule A, Itemized Deductions. If you lost as much as, or more than, you won. Gambling - How do actually really report it. I visited the casino more than usual in 2021 and had a few good slot wins but like most had more losses when all was said and done. If you “netted” your winnings, that caused an Underreporter mismatch against the W-2G. Failure to report gambling winnings, interest and dividends, non-employee compensation (1099-MISC), K-1 items, etc. The Tax Court found that a taxpayer sufficiently substantiated gambling losses of at least as much as his gambling winnings reported for the year. Of course, casinos will issue a Form W-2G, whenever taxes are withheld. If you win $10,000 or more from a single bet, the payer must withhold 24% of your winnings for federal taxes. Whether the taxpayer is a professional or recreational gambler, gambling losses can only be. Gambling income plus your job income (and any other income) equals your total income. First, some gamblers have play at, say, 10 casinos but only want to submit the win/loss statements from 8 of them --- to support whatever they want the IRS to believe the "truth" is. " MAKING THE MOST OF YOUR LOSSES. They had a handful for 2021, but not nearly as much. When you have this printout, the IRS is happy to allow your gambling losses without any further proof. gov; call our Taxpayer Assistance Division at 1 800 732-8866 or 217 782-3336; or call our TDD (telecommunications device for the deaf) at 1 800 544-5304. Revenue Ruling 77-29, 1977-2 C. Gambling Losses In general, you can deduct losses up to the amount of your winnings on your personal return, but you must have proof to support your claims. Practitioners may need to. A: Regardless of whether you win $1 or $1,000, all gambling winnings are considered taxable income. Although he had substantial earnings through. Absolutely, just make sure it includes all wins and losses separately and is not a combined number. $1,500 or more from keno after your wager. [2] IRS Publication 529 (Miscellaneous Deductions) at page 11, states, “You cannot reduce your gambling winnings by your gambling losses and report the difference. There is a threshold requirement for the gambling losses deduction, which means that you can only deduct losses that exceed 2% of your adjusted gross income (AGI). If you itemize, you can deduct $400 for your losses, but your winnings and losses must be handled separately on your tax return. You can find more information about gambling wins/losses in the FAQ below:You would be able to deduct $800 of gambling losses, which includes $300 of slot losses plus $500 of the $600 of lottery losses. 3. For example, if your AGI is $50,000, you can only deduct losses that exceed $1,000 (2% of $50,000). If you’re involved in crowdfunding,. Bookmark Icon. Your and your spouse's filing status. A Power of. Basically, you only paid tax on the gambling income that was more than what you spent in the casino. I have a journal that shows my deposits and withdrawals for each day for the online site and for the Tribal Casino I have recorded how much cash I had for. In the U. C. ” Section 165(d) is good news for casual gamblers. 00. There are many ways to keep track of your winnings and losses when it comes to gambling for most people. Every year,. It also says that your gambling log “should” include other details such as name and address of casino, date and, yes, machine numbers. All winnings are taxable whether you win enough at one time to generate a tax form W2G or not. S. Individuals who gambled as a trade or business, considered. New IRS rules make attempting that an even riskier prospect while you’re filing your income taxes for 2022. Nope. Possible Irs audit for gambling losses claimed on tax return . As a result. The same goes for errors with refundable tax credits, such as the earned income credit and the refundable child credit. There are two types of withholding on gambling winnings: (a) regular gambling withholding at 24% (31. We file. Taking a closer look at the revenue from these wagers, based on the most recent data available in tax returns filed in 2021 for 2020, the IRS reported 1. And for sports betting and fantasy leagues, if you make $600 or more, then the payer is going to report it to the IRS. According to TurboTax, documents you can use to prove your gambling losses include: IRS Form W. Between 2021 and 2023, IRS criminal investigators initiated over 100 investigations into illegal gambling totaling more than $178 million. Gambling losses must be reported by the April 15th deadline, and professional gamblers may have different filing requirements. Turbotax filing losses casino . That number is expected to drop to 385,500 for a loss of 138,500. Unfortunately, the IRS has a different viewpoint. She originally included their gambling winnings from Forms W-2G, Certain Gambling Winnings, in gross income and claimed a corresponding deduction for their gambling losses on Schedule A, Itemized Deductions. Damjan's career took a lot of twists and turns, veering away from humanities towards sports and tech. One of the most common reasons for selecting your tax return is any discrepancy between your reported income and the information that IRS has already. S. Basically, the IRS is selecting income tax returns for audit based on the “gross receipts” received by the taxpayers from gambling, and not on their “wagering gains. Winnings are reported on a gross amount. The Courts and the IRS have interpreted Section 165 (d) of the Internal Revenue Code in such a way that gambling activities cannot be. 77-29 addresses allowable records and substantiation. One issue that taxpayers frequently encounter is the need to substantiate gambling losses before the IRS. Level 15 Mark as New; Bookmark; Subscribe. This can have a significant impact. resident's gross income. This includes titles such as Mega Moolah, Hall of Gods, Mega Fortune and Mega Gems, irs gambling losses joint return. 2021-115, where the Court held the taxpayer could not take §183 expenses as above-the-line deductions). There is a real-tif you have questions about the tax effects of a transaction or event, including the following: ¥ Pension or IRA distributions. The Internal Revenue Service (IRS) also. If you actively participate in the renting of your. Gambling losses are generally deductible for tax purposes. According to the most recent available data, the IRS audited 0. Claiming losses year after year without any profit raises a red flag with the IRS. Mancini wasn’t done filing returns for 2008-10 though. The IRS has audited significantly less than 1% of all individual returns in recent years, so most taxpayers can rest easy. That makes me nervous But they were online deposits. If you find yourself facing this type of audit, a seasoned IRS audit lawyer can defend you and protect your rights. address of the gambling site. However, gambling losses are typically limited to gambling income. the odds of audit had fallen to 3. Instead, if you itemize your deductions, you can claim your losses up to the amount of your winnings. A CP2000 is not an audit. 6. 3079, Tax-Exempt Organizations and Gaming. Although there’s nothing definitive written into the tax code, the IRS has consistently maintained that fantasy sports and gaming competitions involving payments constitute gambling activities for tax purpose s. According to IRS Revenue Procedure 77-29, the diary should contain all of the following: Date and type of specific wager or activity. Depending on the amount you won, you may be required to pay taxes on your gambling winnings. 0 11 1,291 Reply. I thought I remembered a court case or an IRS ruling that would allow an individual to net same-day gambling winnings and losses. Sometimes, that amount of overall taxable winnings can be reduced to $0. In 1985, one of Daneault's clients won a $2. In fact, they form to be a multitude of various different factors that eventually. It's a good idea to keep a diary or daily log to show your wins. The IRS requires the payer to give you a W-2G if you win: $1,200 or more on bingo or slots. •The 2nd Circuit upholds much of the BTA’s decision but based on the testimony decided there were. to substantiate the reported amounts in case of an audit by tax authorities. If you deduct gambling losses up to the amount of your winnings, you could be in for an audit. The Tax Court's decision. All gambling wins and losses must be claimed in the year they occur and they cannot be carried over to later years. The deduction for your losses is available only if you are eligible to itemize your. Diaries and annotated financial records may qualify as sufficient, depending on how thorough they are. The number. In making its decision, the court relied in part on the testimony of a gaming industry expert who testified on behalf of Coleman. Out-of-state farm losses. On audit, the IRS is more likely to demand that a taxpayer substantiate his or her gambling losses. For example, if I showed $25,000 in gambling winnings on my W2G's at the end of the year, but my players card showed I put $22,000 into the casino, I could deduct the. (unless they open an audit to gather the additional. Tournaments: The casino has regular tournaments with prizes for the first five places, how to prove my gambling losses. While the IRS does not have a gambling losses tax, it does allow for you to deduct gambling losses on your tax return in the form of a miscellaneous deduction. Two other factors. Any other wager, if the proceeds are at least 300 times the amount of the bet. tried to find an easier way to input the hundreds of W2-G’s and now are under an audit for 2019. These losses can only be claimed against gambling income. 0323) $40. Under IRS regulations, you must maintain complete records of all your gambling profits and losses. The net result of each session should be tracked. After all, most gamblers lose more often than they win. For federal purposes, you can no longer claim an itemized deduction for a casualty or theft loss unless it is the result of a federally declared disaster. Find out more about reporting gambling losses on your tax return. Individual Income Tax Return. One final note: casual gamblers can deduct gambling losses as well, but not the same way as professionals. The transfer and the expense must occur in the same fiscal year to be deductible. 58% for certain The gaming establishment is required to issue you a W-2G form whenever you win above certain amounts. As the loss was less than their home’s basis of $2,450,000, they claimed the entire amount of the loss on their tax return. However, the issue for professional gamblers was that Sec. On the other hand, calculating the losses should come from the same information used to prove the losses. Gambling losses are often a trigger for IRS audits because most people don't keep careful records of how much they lost while at the casino, racetrack, or another gambling establishment. Therefore, if you lost $3,000 gambling, and won $1,000 of it back, only $1,000 can be deducted as a gambling loss on your tax return under Schedule A. My concern is that the IRS will not know the gambling wins/losses are tied to the 1099-k filing, and will treat them separately (thus expecting taxes to be paid on gambling wins/losses as well a taxes paid on 1099-k values). Exempt 501 (c)3 and 501 (c)4 festival organizations may deduct gambling fund transfers on their Unrelated. Other Requirements: The IRS may have. For table games, as JulianC points out, the IRS will look for session information to come from the taxpayer records. Besides, losses accumulated from gambling cannot be moved forward to counterbalance winnings in another year. It is important to keep an accurate diary or similar record of your gambling winnings and losses (in case of an audit). The AGI is used to limit other tax benefits, as discussed later. When you operate a business and file Schedule C, the IRS assumes you operate that business to make a profit. At the end of the year, A had total wagering gains of $100,000, total wagering losses of $75,000, and incurred $15,000 inA high-level overview of sports betting and tax reporting. If you “netted” your winnings, that caused an Underreporter mismatch against the W-2G. An IRS chief counsel advice memorandum from 2008 suggests that casual gamblers keep a log of gambling by session. Name of the gambling establishment. This change makes documenting and reporting your income from gambling on your 2022 1040 even more. resident's gross income. 165 (d). And for sports betting and fantasy leagues, if you make $600 or more, then the payer is going to report it to the IRS. The maximum deduction is the amount of gambling income you reported on your tax return. Just put 20k on your 1040 and if they audit you let them dig through your records. Books don’t report anything to the IRS unless you hit a 300 to 1 bet for >$600. Another thing that the IRS doesn’t let you do is to net your gambling winnings and losses together. According to IRS statistics, you’re safest if you report income in the neighborhood of $50,000 to less than $500,000. Keep detailed records of each win and loss throughout the year. But the Commissioner further determined that, under. istockphoto. The amount of losses you deduct can't be more than the amount of gambling income you reported on your return. You are not permitted to "net" your winnings and losses. Tax Audit & Notice Services include tax advice only. The gaming establishment is required to issue you a W-2G form whenever you win above certain amounts. Let’s take a look at some data to back this up. in the 'gambling losses' box on my tax form, i put in the same amount as the combined total of w2-g. 2. All gambling losses are tax deductible to the limit of your winnings in a particular year. My co-workers answer was yes you have it, just look harder. If a win/loss statement from a casino shows a negative amount for the year even though I had reportable winnings, which are sent to the IRS,. Federal Income Tax Return. Whether the gambling winnings are $5 or $500,000, all amounts are taxable. The IRS requires detailed records of your gambling activities, including dates, locations, amounts wagered and winnings or losses incurred. Any information provided to you on a Form W-2G. fanfare. You cannot net Monday’s gambling winnings against Tuesday’s gambling loss to report $0 of gambling income because the win and loss occurred in different “sessions” (days). I have a journal that shows my deposits and withdrawals for each day for the online site and for the Tribal Casino I have recorded how much cash I had for the day and how much I brought home . Between 2021 and 2023, CI initiated more than 100 investigations into illegal gambling, totaling more than $178 million. Whether it's $5 or $5,000, from the track, an office pool, a casino or a gambling website, all gambling winnings must be reported on your tax return as "other income" on Schedule 1 (Form 1040). If you have questions and would like to speak with an attorney, please call 619-595-1655 or contact us online for a complimentary case evaluation. Do Gambling Losses Trigger An Audit? Most people don’t keep records of how much they lose at gambling establishments, which can lead to IRS audits. Being proactive and organized can also help minimize the risk of an audit and ensure that you are prepared should one occur. The additional losses are not deductible. These same rules apply for state lotteries. Your gambling loss deduction cannot be more than the amount of gambling winnings. It could be a full-scale, in-person state or IRS tax audit. Taxpayers can claim a limited deduction for gambling losses, but the IRS keeps close tabs on these write-offs. Since winnings and losses can’t be netted, the full amount of the winnings ends up in a taxpayer’s adjusted gross income (AGI). , gambling losses can be deducted only to the extent of your gambling winnings. These red flags need to be closely inspected, in order to avoid IRS Audits as much as possible. Tom, as a valid individual audit. Our firm represents businesses through Southern California in IRS tax audits and appeals as well as Tax Court litigation. Whether the gambling winnings are $5 or $500,000, all. The IRS matches up information it receives on foreign bank accounts. Assuming that was $51k and you had more losses than that, it would make sense to itemize. Machine Jackpots). This applies to both physical and digital gambling, of course. You are allowed to list your annual gambling losses as an itemized deduction on Schedule A of your tax return. Of course, this isn’t the end of the list. The Tax Court found that a taxpayer sufficiently substantiated gambling losses of at least as much as his gambling winnings reported for the year. TABLE OF CONTENTS Claiming gambling. A tax-exempt organization conducting gaming activities may be required to withhold income tax and report on Form W-2G. The IRS requires the payer to give you a W-2G if you win: $1,200 or more on bingo or slots. Mancini. By law, gambling winners must report all of their winnings on their federal income tax returns. Gambling winnings, winnings from sports betting, fantasy leagues, those are all taxable. e. They did not report any gambling income on their tax return for 2005, and the IRS issued a deficiency notice for $2,000 in unreported gambling winnings. Recreational gamblers must report winnings as other income on the front page of the 1040 form. Still, you see how this structure works against taxpayers. However, it must be noted that gambling losses are only audited under situations where there are apparent red flags pertaining to the audit process itself. But, the TCJA amended Sec. You would have to have an individual income above $100,525, including your winnings, to move into the 24% tax bracket. Generally, you'll receive an IRS Form W-2G if your gambling winnings are at least $600 and the payout is at least 300 times the amount of your wager. Claiming large gambling losses can also be risky. According to the IRS, gambling income is taxable and must be reported as part of an individual’s total income on their tax return. In a scenario where you won $10,000 in a year but lost $13,000, you could. Withholding. Call RJS LAW for a free consultation if you are being audited (619) 595-1655The Unites States has what is often referred to as a self-assessed tax system. Tax Professional: Yaw, CPA. [ 3 ]You can only write-off (deduct) $1,000. Technically, if you do not have these records, the IRS can disallow your deduction. If a gambler plays the slot machines in the morning, blackjack in the afternoon and poker in. If you report winnings of $2,000 and your losses were $4,000 you can only deduct $2,000 in losses. If it’s a profit I would net the W-2G amount to match the profit. You cannot deduct more in gambling losses than you report in gambling winnings on your federal income tax return. The Tax Code requires gamblers to record their wins and losses by session. Of course, for jackpot hunters, this is where Cashmio excels as it includes more than 30 jackpot games. Any amount up to $5,000 is taxed. Form 11-C, Occupational Tax and Registration Return for. However, the total tax increased. S. If you lost as much as, or more than. If you itemize, you can claim your gambling. Gambling losses are deductible on your 2020 federal income tax return but only up to the extent of your gambling winnings. Ken Berry Jun. Under prior law, individuals who gambled as a hobby and not as a trade or business could deduct gambling losses only to the extent of gambling winnings. The most obvious way to keep account of this is by holding on to various documents that prove you gambled, including the W-2G forms, gambling tickets, bank records, or any receipt you may have received. If the numbers don’t add up, you could trigger a tax audit. March 3, 2015. On Tuesday, the tax agency punted again,. If you itemize your deductions on Schedule A, then you may also claim your gambling losses and other gambling-activity expenses, such as travel back and forth from a casino or track. Gambling losses can zero out your gambling winnings, but they can. Additionally, not reporting gambling winnings can lead to an audit or investigation by the IRS, which can result in even more severe penalties and potentially criminal charges if the IRS believes. There are also minimum dollar limitations that apply to different types of wagers. For amateur gamblers, gambling losses are reported as an itemized deduction on Schedule A, Itemized Deductions. S. You may deduct gambling losses if you choose to claim Minnesota itemized deductions. ized deduction for gambling losses of $23,480. I visited the casino more than usual in 2021 and had a few good slot wins but like most had more losses when all was said and done. Writing off gambling losses but not reporting gambling income is sure to invite scrutiny. "Let's say you bet $1,000 and you get $3,000 back," says Romeo Razi, a Las Vegas-based. RJS Law represents clients throughout California. If you itemize, you should be able to show the IRS the amounts of your gambling winnings, and your losses, and dates, places, and payers associated with that gambling. C. This is because while winnings are reported as income, losses meet the requirement of. In other words, the IRS will never let you have a net loss when you’re a gambler. You are allowed to list your annual gambling losses as an itemized deduction on Schedule A of your tax return. 3. To calculate your gambling losses, you should keep accurate records. $1,500 or more from keno. The IRS gets copies of all of the 1099s and W-2s you receive, so be sure you report. File a return with math errors. g. All winnings from gambling activities must be included when computing the deductible gambling losses, which is generally always an issue in a gambling loss audit. Coleman spent playing slots would have “overall net gambling losses of at least $151,690 during 2014. If you deduct gambling losses up to the amount of your winnings, you could be in for an audit. Case law and IRS guidance have established that a taxpayer may determine gambling winnings and. INCOME TAX – TREATMENT OF GAMBLING GAINS, LOSSES, AND EXPENSES (Replaces Revenue Administrative Bulletin 2016-3) Approved: December 5, 2022 . This includes cash and the fair market value of any item you win. Gambling Losses . Bachelor's Degree. In December 2012Even if you do itemize, the amount of losses you can deduct can’t exceed the amount of gambling income you reported on your return, according to the IRS. ” For example, if I buy an asset for $70,000, and later sell that asset for $100,000, then I would realize a gain of $30,000.