My husband and I are filing separately. We both have gambling wins and losses. Do we subtract our own losses from our own AGI before we report the subtracted amount on each others community property additions? Or do we have to add all the winnings to the AGI and divide that by 2 to report?
No, you cannot just add up the winnings and divide by 2. You should have been issued W2Gs from the casino or lottery where you won. Each W2G has a social security number and name. You must enter the W2Gs on that person's return.
No, you do not just subtract the losses from your AGI. The information below is the steps and processes for reporting the gambling winnings and losses.
NOTE: You can't just deduct your losses without reporting any winnings. You need to first owe tax on winnings before a loss deduction is available.
NOTE: WITH A FILING STATUS OF MFS IF ONE OF YOU ITEMIZES, THEN BOTH OF YOU MUST ITEMIZE. If the losses are less than the standard deduction, you will not be able to claim the loss unless one of you can itemize, then the other will have to itemize, and will only get a deduction for the amount of the loss. Also, if all you have on the Schedule A is the gambling losses and the state and local taxes which are automatically calculated, you will still have a higher taxable income. You will not pay tax on the gambling winnings but will pay tax on the entire amount of your other income less any credits and your state and local taxes reported on Schedule A.
ALSO, YOU CAN ONLY CLAIM LOSSES UP TO THE AMOUNT OF YOUR WINNINGS.
I'm sorry I wasn't specific as to what I was stating and asking. Yes, I did enter in all the W-2G winnings that my husband and I both received. What I was wondering is how do I enter in the community property portion of the tax return. Do I take the losses into consideration when calculating the community property portions or do I not subtract the losses before I enter in the community property portions? I know what I want to ask, but it's just hard to explain. I hope you can understand this and help me with this question.
Thank you
In looking at the form, you can enter the total. I would determine the net income for each of you and then determine the adjustments that need to be made for each of you. So subtract the losses from the winnings when calculating the income adjustment.