1099-MISC for winnings, but no clear answer on where to enter wagers

[PA_MA_79]

I will be itemizing this year. One of my sporting hobbies offers "options" to potentially win money. To partake in these options, there is a cost. The payout depends on other players and scores that also play the same options.

So, in a sense, it's gambling. I have to pay money to have the opportunity to win, but it's not a guarantee that I will win any money, it's all dependent on my score, versus others, and the money is equally divided out to those who's score is placed. It's called a lewis option.

For example: Let's say I received a 1099-MISC for $750 for the calendar year for winnings. Let's also say that I spent $500 in entries to be able to win that $750. At the end of the day, I'm up +$250, NOT $750. Or, let's say I spent $1,000 in entries to win $750. Obviously, IF it was a W2-G, I could deduct $750 to wash it out. 

The facility that holds these events, after winning a total of $600 or more in a calendar year, will send out a 1099-MISC with the total amount of all the events in box 3.

Since I will be itemizing, where can I enter my total "wagers" to offset the winnings total? I understand that when you get a W2-G and also itemize, that you can deduct your wagers up to the winnings amount, however since I receive a 1099-MISC, I cannot find where to enter my wagers in the same fashion.

I read another thread that mentions just to enter the 1099-MISC box 3 amount as a W2-G and then deduct the wagers, but that doesn't seem quite right; if i receive a 1099-MISC, I would imagine you must enter it as a 1099-MISC and no where else.

[DianeW777]

The income and expense for gambling should be entered without the 1099-MISC. Keep that in your tax file. If you already entered it you can delete it by using the correct link below.

• If you're using TurboTax Online software and need to delete a form, click here.
• If you're using TurboTax Desktop software and need to delete a form, click here.

Yes, every dollar you win is a taxable event for your federal tax return and possibly your state return.

• IRS Topic 419 Gambling Income and Losses
• Can I deduct my gambling losses?

Enter the gambling winnings and losses using the steps below.

1. Sign into your TurboTax Online/Mobile or TurboTax Desktop account
2. Select  Wages and Income > Less Common Income > Gambling Winnings > Start
   1. TurboTax Desktop start with Income > Less Common Income > Gambling Winnings
3. Follow the screen prompts based on your situation (reporting document or none)
4. Be prepared with your gambling losses as well but they may or may not affect your tax return.  If you itemize deductions it could help.

[PA_MA_79]

Thank you for the response. 

By not putting that 1099-MISC when it asks if you have one and instead putting it under gambling, would that trigger any question by the IRS since they are being furnished that information as well?

[CatinaT1]

No, the IRS is going to see the income was reported as gambling income. There are several instances where income is reported on a 1099-Misc in box 3 that is reported differently than other income on your return, so your situation is not uncommon.