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Richard, Tax Attorney
Category: Tax
Satisfied Customers: 55132
Experience:  29 years of experience as a tax, real estate, and business attorney.
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When I win jackpot, do I report wagering gain (winning-basis)as

Customer Question

When I win jackpot, do I report wagering gain (winning-basis)as income for income tax return or I report the entire winning amount on income tax return?
Submitted: 6 years ago.
Category: Tax
Expert:  Richard replied 6 years ago.

Good evening. You can deduct gambling losses against any gambling winnings when reporting gambling activities on your income tax return.


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Customer: replied 6 years ago.

This is my question:

How much Income and losses should Tom report on income tax return?Tom hit a $3,500 jackpot on a slot machine. other information: 1. the day he won jackpot, he went to casino with $200 in pocket. 2. After winning jackpot, he continued to gamble. 3. By the time he left the casino, he had $3,000 in his pocket. 4. While visiting the casino, he only gambled. He did not spend money on food, beverages, on any other items. 5. he didn't gamble at any other time during 2010, doesn't expect to do so before the end of the year. 6. Last spring, he won $250 in a basketball pool at his office.

Expert:  Richard replied 6 years ago.

He has winnings of: i) $3500, plus $250

He had losses of: i) $700.



Customer: replied 6 years ago.

but I saw under US court decision in George D. shollenberger v.Commissioner, it says we should use wagering gain as gross income, So I think the wagering gain=winning-basis=3000-200=2800, and we should report 2800 as gross income, why is that wrong?

Expert:  Richard replied 6 years ago.
That's not can certainly net everything. I thought from your question, you wanted the gains and losses delineated.
Customer: replied 6 years ago.
So for that question, what should I use as income? 3500 or 2800? I'm confused, that's a hw question, professor gives us tax autohority IRC 61 and Shollenberger case as reference.
Expert:  Richard replied 6 years ago.
Customer: replied 6 years ago.
So does the deductible loss change? or is it still 700?
Expert:  Richard replied 6 years ago.

Ok...Technically, here's how you report it...i) $3750 winnings on Line 21 of your Form 1040; and then ii) deduct your $700 worth of loss on Schedule A.

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