![]() ![]() ![]() When a taxpayer enters a casino and plays slot machines, then any losses can be netted with the winnings until the taxpayer redeems the tokens (cashes in the chips) ( Chief Counsel Advice 2008-011). Another exception to the no-netting rule exists for slot machines. However, any gambling losses incurred during the installment payout period can only be deducted up to the amount of the installment for that year. However, lottery and sweepstake winnings that are paid out annually as installments are reported as income in the year in which the installments are received rather than in the year of the winning. If the taxpayer does not itemize, but instead, claims the standard deduction, then the gambling losses cannot be deducted at all. So, for example, if a taxpayer wins $2000, but later loses $1500, then the taxpayer must still claim $2000 as other income, while the $1500 loss must be claimed as an itemized deduction. Instead, losses must be claimed as an itemized deduction on Schedule A, Itemized Deductions that is not subject to the 2% adjusted gross income ( AGI) floor, but the amount of losses claimed cannot exceed the winnings. Wagering gains or losses in 1 year cannot be used offset losses or gains in another year nor can wagering losses be used to offset non-wagering income. Winnings from gambling, sweepstakes, lotteries, and raffles are fully taxable as "Other Income" on Form 1040, but losses cannot be netted against winnings. Taxation of Gambling Income › Money › Taxes › Income Taxes Taxation of Gambling Income ![]()
0 Comments
Leave a Reply. |
Details
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |