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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 10437
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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I addict in gambling this year. I have lost around 150,000

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I addict in gambling this year. I have lost around 150,000 in total, and has sold 110,000 my investment in 401k to pay the loss . The jactport W2-G shows I have won 490,000.Instead, I have lost 150,000 in total. What thing I should prepare to show IRS that I actually lost, which alow mw to claim it for item deduction. I play slot, but I didn't insert my player card, so the casino cannot track the win-loss for me. What thing I should to do now

Lane :

Hi,

Lane :

What the W-2 reports is only the winnings

Lane :

However, you CAN deduct gambling losses UP TO your winnings (so gambling losses can't be used to offset OTHER income)

Lane :

TO do this, you'll have to itemize your deductions on schedule A when you do your taxes, for the year in question.

Lane :

Here's the IRS guidance:

Lane :

You may deduct gambling losses only if you itemize deductions. However, the amount of losses you deduct may not be more than the amount of gambling income reported on your return. Claim your gambling losses on Form 1040, Schedule A, as a miscellaneous itemized deduction that is not subject to the 2% limit.

It is important to keep an accurate diary or similar record of your gambling winnings and losses. 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. Refer to Publication 529, Miscellaneous Deductions, for more information.

Customer:

can i show my statement for my checking account, credit card account ? Is t enough

Lane :

yes, there have been cases where even a written log has sufficed ... statements such as credit card or bank statements are perfect

Lane :

you don't send in copies with your taxes, you simply write it off on schedule A ... gambling losses, as you saw above are not restricted to the 2% agi minimum so you can completely wipe out any winnings if you lost more than you won

Lane :

The, should be audited, you'll have thos documents in your files

Lane :

IF you should be, and there's no reason to think that you would be, ANY MORE than others with gambling losses .... As you probably know, gambling losses are quite common

Customer:

I have withhold 5% for my winning in state tax. can it calim as deduction

Lane :

NOt withholdings, but whatever state taxes you actually owe when you do the taxes(whether it's more of less that what you had withheld) IS deductible

Lane :

QUestions?

Customer:

In this case, I actually loss in total, but mypart I win still has to pay for state tax of couse. However, this can be claim as deductuin in federal tax

Customer:

just confirm

Lane :

That's exactly right

Customer:

whow thankyou

Lane :

Yes, you have it ... and of course the 5% withheld at the state level offsets whatever you owe

Customer:

i don't have to send the statements until IRS ask

Lane :

That's right

Customer:

thanks, XXXXX XXXXX have any question

Lane :

Just as you don't show OTHER documents you can deduct like property taxes

Lane :

Great .. Glad we could help

Lane :

If this has helped, I would appreciate a feedback rating of 3 (OK) or better (excellent, is ideal)… That's the only I get credit for the work.


However, if you need more on this, please come back here, so you won't be charged for another question.

Lane and 2 other Tax Specialists are ready to help you

Hi Yung,

 

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Lane



Thanks so much for the rating Yung.

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Thanks again!

Lane


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