How do you document gambling loses?

[icft]

13 hours ago, kwokpot said:

That's incorrect. The IRS had no definition on what constitutes a gambling session. It isn't spelled out Anywhere.

 

4 hours ago, Elaine5715 said:

The ruling is in the above post.

If you are referring to post #14, that is not a ruling but rather a report in the Journal of Accountancy concerning a tax court decision.

 

If you are referring to the Office of Chief Counsel legal memorandum AM 2008-011 then you will find it here:

https://www.irs.gov/pub/irs-utl/am2008011.pdf

and it does not define "session."

 

Also note that it is advice, not a ruling. At the top it states "This advice may not be used or cited as precedent." It is the kind of thing generated by legal when asked by the field agents for guidance on the handling of an issue. It is not a law or regulation and therefore bears no weight in support of an IRS position, though its existence does allow an estoppel argument against the IRS (it is a sword that can be used against the IRS but not by the IRS).

 

[icft]

Someone pointed out to me a point of possible confusion.

 

Some may have noticed that in the headlines about the tax court case cited above it is said "that they could not net their wins and losses across the year" while the Office of Chief Counsel legal memorandum AM 2008-011 does allow for deducting losses from sessions other than the winning sessions.

 

The difference is that in the tax court case the taxpayers were arguing that the losses from other sessions in the year could be netted with the winning session to determine INCOME. The tax court rejected that saying"...their gambling losses are allowable only as itemized deductions. But because petitioners have elected the standard deduction, they are not entitled to itemize their deductions." The legal memorandum notes "A casual gambler who elects to itemize deductions may deduct wagering losses, up to wagering gains, on Form 1040, Schedule A."

 

So the headline is a bit misleading. The tax court and the legal memo are in agreement that IF you itemize you can deduct your losses up to the amount of your winnings for the year.

 

For reference, the tax court decision:

https://bradfordtaxinstitute.com/Endnotes/TC_Memo_2009-306.pdf

 

[mfs2k]

 

Everybody is an accountant. 

 

[carohs]

For me it's pretty simple. Don't gamble more than the standard deduction... 

[ldubs]

3 hours ago, mfs2k said:

 

Everybody is an accountant. 

 

 

Hahaha.  I think I might accept medical advice on a forum before I accepted IRS tax prep advice.  

[sgttami]

Documenting is easy.  If I go home smiling with more $$$ than I started gambling with, I'm a winner.

 

If I get off the ship with a long face and no gambling money left, I lost!

 

It's been a while since I hit a hand pay so until that happens again, I won't worry about it.

                       $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$

[john91498]

I don't think it's worth the hassle to report win/lost on gambling. Some cruises or Vegas trips, I win $10k and on some trips I lose $10k. It's just for fun, why open up a can of worms from the IRS?

[kwokpot]

13 hours ago, john91498 said:

I don't think it's worth the hassle to report win/lost on gambling. Some cruises or Vegas trips, I win $10k and on some trips I lose $10k. It's just for fun, why open up a can of worms from the IRS?

It depends on how much your annual W-2G's total. Ours total over $100,000/yr, so it behooves us to try to reduce the tax liabilities.

Edited May 7 by kwokpot

[john91498]

50 minutes ago, kwokpot said:

It depends on how much your annual W-2G's total. Ours total over $100,000/yr, so it behooves us to try to reduce the tax liabilities.

 

Wow, ur a baller. We take 3-4 cruises a year and about 6-9 trips to Vegas. We don't even come close to $100k. Heck, I'd be surprised if we were +/- $3k for a year...lol...🤣

[kwokpot]

13 hours ago, john91498 said:

 

Wow, ur a baller. We take 3-4 cruises a year and about 6-9 trips to Vegas. We don't even come close to $100k. Heck, I'd be surprised if we were +/- $3k for a year...lol...🤣

Quite honestly It's been a wild. We are both retired and my husband has been earning W-2Gs more than his annual salary ever was. We live in Philadelphia so Atlantic City is 1 hour away. We regularly treat the whole family to multiple comped rooms in both Vegas and Atlantic City, along with food and entertainment comps. Our basement is filled with casino gifts - do you need any luggage, foot bath,crock pots, or stick vacuums,lol?

 

I think the party's over, though. We have re- evaluated our multiple Atlantic City trips and my husband has decided to pull back what he spends towards his gambling both on land and at Sea. On our current trip, which included a comped Carnival cruise from LA and the current Ovation cruise from Honolulu, he played very little of his own money and came out ahead from both his play and the Freeplay given. And on the current Ovation cruise he hasn't played any additional money besides the $1,500 Freeplay which we netted out $1,800. 

Edited May 7 by kwokpot

[ldubs]

6 hours ago, john91498 said:

I don't think it's worth the hassle to report win/lost on gambling. Some cruises or Vegas trips, I win $10k and on some trips I lose $10k. It's just for fun, why open up a can of worms from the IRS?

 

Seems like not reporting a $10K win might open up a bigger can of worms.  Is it even possible to not report a $10K win?  From what I read on these forums, big winners are on the hook because the casino reports big wins to the IRS.     

[kwokpot]

5 minutes ago, ldubs said:

 

Seems like not reporting a $10K win might open up a bigger can of worms.  Is it even possible to not report a $10K win?  From what I read on these forums, big winners are on the hook because the casino reports big wins to the IRS.     

It depends what was meant by a 10K win from a Vegas trip. You can easily be up 10K without hitting a single slot jackpot; furthermore,table games winning of ANY AMOUNT aren't subject to W-2G reporting.

Edited May 8 by kwokpot

[ldubs]

8 minutes ago, kwokpot said:

It depends what was meant by a 10K win from a Vegas trip. You can easily be up 10K without hitting a single slot jackpot; furthermore,table games winning of ANY AMOUNT aren't subject to W-2G reporting.

 

I had no idea how that works.  Thanks.

 

[john91498]

1 hour ago, ldubs said:

 

Seems like not reporting a $10K win might open up a bigger can of worms.  Is it even possible to not report a $10K win?  From what I read on these forums, big winners are on the hook because the casino reports big wins to the IRS.     

 

I meant over a weekend in Vegas or a 7 day cruise. I don't think I've ever won $10k in a single day...🤣

 

I've brought a few grand worth of chips to the cage before and I've never been asked for my ID or anything for reporting.

[roxievegas]

you report your winnings on your 1040 form using the 1099 that is sent by the cruise line.  You get a win/loss statement from the cruise line.  

 

if you won $1,500 that goes as income, if you loss $2,000 you can only put down your losses that are equal or less than the amount you received on the 1099.  So you can only show a loss of $1,500 and it is a wash.   You can not claim that you loss more than what you received on the 1099.

 

 

[john91498]

In all my years of gambling, not once have I ever received a 1099 from any cruise line...or from Vegas...

[memoak]

15 minutes ago, john91498 said:

In all my years of gambling, not once have I ever received a 1099 from any cruise line...or from Vegas...

Then you have not gotten a payout of over $1,200 on any one bet. These are paid by hand and you get a tax form at that time. It has happened to us many times

[kwokpot]

1 hour ago, roxievegas said:

you report your winnings on your 1040 form using the 1099 that is sent by the cruise line.  You get a win/loss statement from the cruise line.  

 

if you won $1,500 that goes as income, if you loss $2,000 you can only put down your losses that are equal or less than the amount you received on the 1099.  So you can only show a loss of $1,500 and it is a wash.   You can not claim that you loss more than what you received on the 1099.

 

 

You are confusing a Win Loss Statement sent by casinos and the cruiseline casino departments with a 1099. They are not the same thing. Casino winnings aren't reported on a 1099. Occasionally 1099s are sent for certain casino gift drawings. For example, on Carnival cruises, on an Ultra cruise where there's a drawing and guarantee winning of a gift or Freeplay, Carnival issues a 1099 for the value of the gift or Freeplay that everyone that signed up for the Ultra cruise will receives.

[john91498]

33 minutes ago, memoak said:

Then you have not gotten a payout of over $1,200 on any one bet. These are paid by hand and you get a tax form at that time. It has happened to us many times

 

Oh, it's 1 bet. Heck, I usually play $100 hands, but never $1200 hands...

[roxievegas]

26 minutes ago, kwokpot said:

You are confusing a Win Loss Statement sent by casinos and the cruiseline casino departments with a 1099. They are not the same thing. Casino winnings aren't reported on a 1099. Occasionally 1099s are sent for certain casino gift drawings. For example, on Carnival cruises, on an Ultra cruise where there's a drawing and guarantee winning of a gift or Freeplay, Carnival issues a 1099 for the value of the gift or Freeplay that everyone that signed up for the Ultra cruise will receives.

On a trip to Lake Tahoe, I won $1800+ and my husband $1600+, we received a tax form with the money amounts to be reported.  We also had a win/loss record from the casino and reported that on our taxes.

On a cruise with Celebrity, I hit a jackpot $1800+ and I had to fill out forms before they would give me my money (on the ship) and I received a tax form from the casino department at the end of the year, and I also requested a win/loss record .

 

I can only give you info that I personally have had.

[kwokpot]

19 minutes ago, roxievegas said:

On a trip to Lake Tahoe, I won $1800+ and my husband $1600+, we received a tax form with the money amounts to be reported.  We also had a win/loss record from the casino and reported that on our taxes.

On a cruise with Celebrity, I hit a jackpot $1800+ and I had to fill out forms before they would give me my money (on the ship) and I received a tax form from the casino department at the end of the year, and I also requested a win/loss record .

 

I can only give you info that I personally have had.

You're talking about a W-2G,which is the IRS tax form on gambling winnings(of certain types,like slot machines)of $1,200 or more. W-2Gs aren't 1099s. Those are two distinct IRS forms. They aren't remotely interchangeable.

[kwokpot]

https://www.thetaxdefenders.com/irs-and-gambling-w2-g-forms-casino-winnings-and-deductible-losses/

[kwokpot]

1 hour ago, memoak said:

Then you have not gotten a payout of over $1,200 on any one bet. These are paid by hand and you get a tax form at that time. It has happened to us many times

That's a W-2G form,not a 1099. Please don't confuse the two types of tax forms.