Tax Question

[drvegas]

Has anyone that is not a "professional" gambler written gambling losses off as a deduction. A friend of mine said that he estimated that he lost 20,000 online gambling and that he claimed that on his taxes and got a big write off becuase of it.

Has anyone ever tried this?
:modemman:

 

[PercocetThreat]

I never have but you certainly can write them off. Problem is that if you do not normally itemize you now have to in order to report gambling winnings/losings. Therefore you lose the standard deduction.

Also, I would assume the probability of an audit goes up 10 fold so you better be able to substantiate those losses.

 

[JustWin]

Threat,

I've read a few of your posts and you have said a couple of times, 'you lose the standard deduction'. Can you go into what you're saying a little more. The way I read it, if you claim gambling profits, you lose the 'standard deduction'. I don't think I'm understanding the 'standard deduction', any light you can shed or point me in the direction, thanks.

 

[PercocetThreat]

If you do not itemize then you get to deduct what is known as the "standard deduction". ($5,000 for 2005)

When you report gambling winnings/losses then you have to itemize. When you itemize you can no longer use the standard deduction.

Let me know if that explanation is unclear.

 

[drvegas]

Threat

I understand that and I itemize anyways becuase with my practice I can write off a number of things. I do not use the standard deduction anyways and have a number of substanial things that I can write off but I was wondering if it is worth it or not. I would probably this year claim about 10K in gambling losses :drink:

 

[Fishhead]

Sure you may deduct your losses on Schedule A.

Report winnngs on LINE 21 as GAMBLING WINNINGS and deduct ANY amount of losses UP TO that amount on Schedule A.

 

[CHRISG612]

Another really stupid question but I don't know the answer...I have never filed my gambling winnings or losses (frankly I don't win very much anyways) but just recently I won a little and withdrew. This was during last month (January). Would I file my winnings for that period next year when I file?

Seems like a silly question I know, but I already filed yesterday and didn't put my winnings that happened last month on them.

Thanks for all the help.

 

[PercocetThreat]

Threat

I understand that and I itemize anyways becuase with my practice I can write off a number of things. I do not use the standard deduction anyways and have a number of substanial things that I can write off but I was wondering if it is worth it or not. I would probably this year claim about 10K in gambling losses :drink:

Honestly, I am not even sure you can claim gambling losses in excess of your winnings. Per Fishhead's post above I gather that is what he is saying.

I suppose if you file as a sole prop/professional gambler then file a Schedule C you may be able to actually deduct losses and carry them over to your 1040?? All I know is that if you report gambling action you lose the standard, but it's a moot point in your case since you already itemize. Wish I could be of more help, sorry.

 

[PercocetThreat]

Another really stupid question but I don't know the answer...I have never filed my gambling winnings or losses (frankly I don't win very much anyways) but just recently I won a little and withdrew. This was during last month (January). Would I file my winnings for that period next year when I file?

Seems like a silly question I know, but I already filed yesterday and didn't put my winnings that happened last month on them.

Thanks for all the help.

I would interpret actual "winnings" as when you moved the money into your bank account. Since you moved them in 2006 you should be fine as far as 2005 goes. They would be reflected on your 2006 return.

I'd consult a tax professional just to make sure but I think that is a reasonable interpretaion. Filing an amended return SUCKS!!!

 

[poopah]

You can't deduct gamnling losses, unless you had winnings the year before, and you can only claim losses adding up to your last three years of winnings, gambling losses is not deductable otherwise. Yes just another way uncle sam sticks it in our ass.

 

[Labeeb]

I've never heard of using the last three years losses against your winnings. Where is this written in the code? Can some one else corraborate?

 

[Whoson1st]

I've never heard of using the last three years losses against your winnings. Where is this written in the code? Can some one else corraborate?

That's make at least 2 of us that have never heard of such a thing as 3 years.