@Katherine S 63@davidGAW
Were you two ever able to figure this out? The amount of researching the "how" is quite frustrating. Like you two, I fully understand what is required on how to document a session, and I fully understand that a session "loss" can only be netted to $0 for a particular session. Therefore, I understand that when I add all of my sessions for the year, I would only be summing sessions that have a gain of $0 or more. The losing sessions can't be used in the calculation.
So now that I've cleared the air in articulating my understanding of how to calculate session wins/losses (since the default for most experts here is that I don't understand the law), I could use some help on how you've actually reported the session method on both the Federal and State returns, to ensure the AGI isn't messed up (since the session method has to be used for both Federal and State).
I emailed Wisconsin DOR and their response was "sort of" clear, but sort of not.. to @davidGAW 's point, TurboTax should have a workflow built into the program to help guide people to report gambling wins/losses correctly. A series of questions that qualify whether I am declaring the Session Method to report, or not. There are massive differences in the two methods.
Here is what the Wisconsin DOR had to say:
"If a win results from a session, the amount of the winnings less the amount of money wagered, must be reported as income on line 8b of federal Schedule 1 (Form 1040). If a net loss results from a session, the loss is not deductible for Wisconsin income tax purposes as Wisconsin does not allow a deduction for miscellaneous itemized deductions for purposes of the Wisconsin itemized deduction credit (sec. 71.07(5), Wis. Stats.).
Since you are allowed to deduct losses for your federal return but not for the state return, there would be a difference in the reported federal adjusted income. To account for this difference, you would need to create a "Wisconsin Only" form 1040 Schedule 1. Report only the winnings on line 8 of the 1040 Schedule 1. The totals of the 1040 Schedule 1 will then flow to line 8 of the 1040. This will create a new federal adjusted gross income, as losses will not be included.
The new adjusted gross income of the 1040 will flow directly to line 1 of the Form 1"
