See this TurboTax website for information when playing fantasy sports - https://turbotax.intuit.com/tax-tips/general/tax-considerations-for-fantasy-sports-fans/L75xYecdS
Reporting income or loss from fantasy sports on Form 1040
You must report all income earned from fantasy sports either as "other income" on Schedule 1 for Form 1040, or as business income on Schedule C. If you use the first approach, your fantasy sports is considered a hobby and you can't deduct any of your expenses or losses.
Reporting income or losses from fantasy sports as business income
If you can establish that you play fantasy sports as a business, you can report your net profit as business income on Schedule C. The great advantage to this tax choice is that you can then report all losses as well. If you have a net loss for the year, you can use that loss to reduce taxable income from jobs you hold or other businesses you run.
The IRS allows you to claim fantasy sports as a business if you can convince them it is not a hobby and that:
- You engage in fantasy sports regularly, and
- Treat it as a business activity with the intention of earning a profit
The IRS may consider an activity to be a business if it earns a profit at least two years out of every five.
