topic How to prove gambling losses? in Deductions & credits

How to prove gambling losses?

dhuber24 — Sat, 25 Jan 2025 19:11:11 GMT

If I play a slot machine, put in $100 (proof from an ATM withdrawl in that casino on that day), I hit a $2000 jackpot, a W2G is issued. I continue playing that slot machine and lose all of, including the $100 I started with.

I understand that I can't deduct the $100 loss (money I started with), but I can report on my tax return that I lost the $2000 to show a net of $0 gain.

My question: how do I prove that I lost all $2000 plus the $100 I started with?

I don't use a players card, so a casino statement isn't possible. I also don't have a cash out receipt (since I played until I lost all of it). Where is my proof? Other than a record on a spreadsheet I maintain?

Re: How to prove gambling losses?

MaryK4 — Sat, 25 Jan 2025 19:41:38 GMT

You can prove your losses with the spreadsheet you mentioned if it has all the information require by the IRS. This includes:

The date and type of your specific wager or wagering activity.
The name and address or location of the gambling establishment.
The names of other persons present with you at the gambling establishment.
The amount(s) you won or lost.

See Gambling Losses Up to the Amount of Gambling Winnings

You can also complete Form 5754, Statement by Person(s) Receiving Gambling Winnings

Re: How to prove gambling losses?

dhuber24 — Mon, 27 Jan 2025 21:42:49 GMT

Does this mean it is simply the honor system any time I claim I continued gambling until I lost everything I won? As long as I document it, the IRS can't question it?

What worries me is that the IRS doesn't believe me. If I legitimately win, let's say a $20,000 taxable jackpot (and W2G issued) and then spend it all back during that same gambling session, is it possible to lose an audit because I can't prove it, other than what I documented in my spreadsheet?

Re: How to prove gambling losses?

An2425 — Wed, 12 Feb 2025 16:45:16 GMT

What if you played online and did not record the name of the person you played (who then won the game?). I kept a detailed log of my losses, but didn’t include that detail. What should I do in this case?

Re: How to prove gambling losses?

Vanessa A — Wed, 12 Feb 2025 17:15:52 GMT

You do not need the name of the person who you lost to. As long as you have proof that you spent the money, then you can claim it even without a name of the other person.

Be aware, In order to claim gambling losses, you must itemize your return. if you do not itemize your return, you cannot deduct gambling losses.

Itemized expenses include mortgage interest, gambling losses up to winnings, charitable contributions, state and local taxes up to $10,000, medical expenses in excess of 7.5% of your AGI and casualty and losses in excess of 10% of you AGI with the first $100 not counting towards the loss.

Then your total itemized expenses would need to be greater than your standard deduction below in order to benefit from your expenses.

The 2024 Standard Deductions are as follows:

Married Filing Joint (MFJ) $29,200
Married Filing Separate (MFS) $14,600
Head of Household (HOH) $21,900
Single $14,600

Blind or over 65 and MFJ or MFS add $1,550

Single or HOH if blind or over 65 add $1,950

Standard versus Itemized Deduction