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Barbara
Barbara, Enrolled Agent
Category: Tax
Satisfied Customers: 3780
Experience:  20+ years of experience in tax preparation; 25+ years of experience as a real estate/corporate paralegal.
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I have won 340,000 dollars in 2015 gambling. All of it I won

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I have won 340,000 dollars in 2015 gambling. All of it I won playing slots. I won one jackpot for 83,000 dollars. As I am preparing to do my taxes and reading the IRS rules for wins and losses I am totally confused as to what they want me to do to claim my losses. I have my bank statements where I have taken money out at the casino to play. I will have my win loss statement from my players card, however I did not use it during the first half of the year when I had most of my winnings. I just started using it because I knew I needed to start tracking things. I also do have a log of some of my play. Do I need to claim in my earnings wins that I didn't get a 1099 for ? Can I show these winnings being used to supplement my current business that I file a schedule C ? I just don't want to leave myself hanging and them not allow any of my losses. HELP

Welcome to Just Answer. My name is ***** ***** I will be happy to assist you.

Gambling winnings are fully taxable and you must report them on your tax return. You may deduct gambling 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 Schedule A as Otherr Miscellaneous Deduction" (line 28) that is not subject to the 2% limit.

In answer to your specific questions, yes to the first and no to the second.

https://www.irs.gov/taxtopics/tc419.html

Please let me know if you require further information and clarification.

Thank you and best regards,

Barb

Customer: replied 1 year ago.
I understand that I have to itemize. I do that anyway, as my husband and I both are self employed. But where I am not certain as to what to do and I need details is on the claiming of the income. So what you are saying is ... If I go to the casino and I play 100 dollars and I win 400 and then I play that off and on the last 5 dollars I win 500 and then play that off and at 100 of that money I win another 700 I have to claim that 700 in addition to anything that I received a 1099 for? I am sorry I am so confused.
Customer: replied 1 year ago.
Also, are you familiar with California tax laws in relation to gambling winnings for state taxes. Are the rules different?

You claim the full amount of your gambling winnings on Line 21 (other income) of your 1040.

You deduct your losses on Schedule A.

For example, if your total gambling winnings for the year were $50,000, but you spent $60,000 to win the $50,000, you would itemize your losses up to the amount you won--$50,000. You would then be paying tax on $10,000.

I will address your question regarding CA in a few minutes.

California excludes California lottery winnings from taxable income. Enter in column B the amount of California lottery winnings included in the federal amount on line 21 in column A. Make no adjustment for lottery winnings from other states. They are taxable by California. California and federal laws allow gambling losses only to the extent of reported gambling income. If you reduced gambling income for California lottery income, you may need to reduce the losses included in the federal itemized deductions on line 38. Enter these losses on line 41 as a negative number.

Customer: replied 1 year ago.
Maybe I am not being clear.... I understand the deduction of the losses verses the wins. What I am not clear on as I read the IRS rules is do I claim money that I won during regular play that I was not given an 1099 for ? The 300 dollar wins the 150 dollar wins as they are also part of my losses if I play them back in the machine? Am I required to keep of log of all of these wins. I didn't hit the lottery I won a jackpots on slot machines. So what you are saying to me about California and lottery doesn't apply. What about slots in California? Thank you again for your patience

As I mentioned in my initial response, ALL gambling winnings are reportable, whether or not you received a 1099. Once you add up your total winnings, if you won $300 and then put back $150 to continue to play, your total winnings would be $300 and your total losses would be $150.

Make sense?

Give me a few minutes to research lottery v. slot machine winnings as they pertain to CA.

All gambling winnings are subject to taxation in CA EXCEPT CA lottery winnings. The procedure would be the same as for federal.

Barbara and other Tax Specialists are ready to help you
Customer: replied 1 year ago.
Okay,.... Yes makes sense LOL I am sorry I am being so thick headed. I feel like I am learning algebra all over again!!! So, just to be clear. If I have a log of whatever money I went into casino with and what ever I took from atm that day and I can to some degree... as there is really no way of calculating exacts if you win and then play it off in same session of play (could refer to my players card statement at end of year for win losses, and then use my 1099's, in addition to my wins if that is what I show from my card and my log book. Does that sound correct?

Perfect.

Customer: replied 1 year ago.
Thank you for your patience you have been great!!!!!

It's been my pleasure.

Thank you for the positive rating of my answer. It is most appreciated.

If you have any questions in the future, please feel free to specifically request me by putting "for Barb" in the subject line.

Best regards ***** ***** a great weekend!

Barb