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deleting post- bad recomendations by users ignoring tax code

Forum|Forum|3 years ago
September 28, 2022
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Best answer by CuriousWhale

After 30 years as a tax pro + 8 years of teaching the income tax prep course, I can concur with the TT FAQ ... this has always been the rule. If you want to enter less than what was reported on a W-2G then by all means do so and when the CP2000 notice shows up in a couple years you can have this debate with the IRS so keep good records to support your position.

Now the Rev code you sited has to do with the netting of the slot machine payout that you take to the window to cash out. If you put in 100 and get out 5000 then the casino will report the 5000 and so must you. On your return you can deduct the 100 on the Sch A if you itemize. Same thing if you had put in 5000 but only cashed out 100 ... 100 is the winnings and the 5000 is reported on the Sch A. Most casinos will give you a printout (Commonly referred to the win/loss statement) if requested to use to support your position.

this in plain text word for word from the IRS

"In ordinary parlance, a wagering “gain” means the amount won in excess of the amount bet
(basis). See Rev. Rul. 83-103, 1983-2 C.B. "

The revenue rule itself gives the litteral example . A better who places a $20 wager and wins $100,000 has a wagering gain of $99,800 and that is what would be classified as income.

The revenue rule is part of the tax code. The tax code is the land of the law. I am trying to understand what you are saying to discredit the revenue rules of the tax code.

DoninGA

Employee

The article is correct - https://turbotax.intuit.com/tax-tips/jobs-and-career/how-to-pay-taxes-on-gambling-winnings-and-losses/L7JNH7mjn

Total Winnings are reported as income on a tax return regardless of the amount of losses incurred in gambling. Losses are reported on Schedule A as an itemized Miscellaneous deduction. Losses reported cannot be more than winnings.

Further down the article it is noted how to report the losses -

You can deduct your losses…to an extent

You can’t deduct the cost of your wager from your winnings when determining how much you won, but you can deduct your gambling losses subject to certain rules.

You must itemize your deductions to claim your gambling losses as a tax deduction.
This means you can’t take the standard deduction for your filing status, which often amounts to more than a taxpayer’s itemized deductions.

You’re allowed to deduct losses only up to the amount of the gambling income you claimed. So if you won $2000 but lost $5,000, your itemized deduction is limited to $2,000. You can’t use the remaining $3,000 to reduce your other taxable income. You have to claim $2,000 in income on your Form 1040 and then separately claim $2,000 as an itemized deduction.

C

CuriousWhaleAuthor

No, the article is wrong. The revenue ruling is part of the **bleep** tax code and is crystal clear on defining what is reported. How are you disregarding the tax code for a TurboTax opinion?

DoninGA

Employee

See IRS Memorandum from 2008 - https://www.irs.gov/pub/irs-utl/am2008011.pdf

A casual gambler who elects to itemize deductions may deduct wagering
losses, up to wagering gains, on Form 1040, Schedule A. In this case, the taxpayer
may deduct only $350 of her $610 of wagering losses as an itemized deduction. A
casual gambler who takes the standard deduction rather than electing to itemize may
not deduct any wagering losses. See Rev. Rul. 54-339, 1954-2 C.B. 89

See IRS Publication 17 page 104 - https://www.irs.gov/pub/irs-pdf/p17.pdf#page=104

You can't reduce your gambling winnings by your gambling losses and report the difference. You must report the full amount of your winnings as income and claim your losses (up to the amount of winnings) as an itemized deduction. Therefore, your records should show your winnings separately from your losses.