In NJ, where you can bet on the DraftKings Sportbook App - let's say you make a "Sportsbook Bet" of $4,000 on a team to win and this eventually resulted in a "Sportsbook Payout" of $4,500 (a slim net profit of $500). Would my "winnings" be $4,500, and if so, can I use the cost of the bet as an itemized deduction of $4,000?
If the
bet/wager itself does not count as gambling loss, then you would be taxed much more than you profited on that bet. If the tax rate on winnings is roughly 25%, you would be taxed over $1,000 for profiting only $500.
As a side note - DraftKing's “full transaction history” excel document for Sportsbook has individual rows for each bet
(debit) and individual rows for each payout (credit) with separate transaction IDs.
Basically, you cannot tell which bet ended in a loss or ended in a win from their transaction document.
