@tp1986 wrote:
Makes sense. I guess my hang up is on whether documentation would survive scrutiny of audit. Since the only records for winnings and losses are end of the year statements and bank records to substantiate the loss claim. As opposed to session by session journal.
maybe notable, this is an all online scenario and I know IRS hasn’t updated any guidance when it comes to the highly tracked online industry with fairly detailed reporting that doesn’t rely on a player using their player club card every time to have accurate records.
For some of that, you may need to contact the online gambling service. I don't really know how they handle things or how they should handle things. For example, if you place 100-$10 bets on Sunday football, and most of your bets lose but one comes in big at 100:1, is that reported as $1000 win and $990 of losses, or is that reported as a $10 loss? If you get a W-2G for the $1000 win, who tracks the losses, you or the bookie? It sounds like you need to ask the bookie.
Here's what the IRS says.
https://www.irs.gov/taxtopics/tc419
Certainly, for any deduction, contemporaneous records are always better documentation than trying to reconstruct from year-end financial statements. I suppose that if you can show you paid the bookie $1.05M (in your example) and you have W-2Gs equaling $1M, that implies a $50K loss.
Here's an article that describes a recent tax court case, and a link to the case.
https://ashleyquinncpas.com/irs-tough-on-gambling-loss-documentation/
https://www.courtlistener.com/opinion/4562761/renner-v-commr/
Here's a Turbotax blog post
https://turbotax.intuit.com/tax-tips/jobs-and-career/can-you-claim-gambling-losses-on-your-taxes/L4l...
