We are using Schedule C for my wife's business (Gambling). TurboTax allows us to report net gambling loss lowering our overall tax liability. Is this acceptable to IRS?

[rgrilli365]

2018 filing joint return. Husband has taxable income; wife has business loss from gambling. TurboTax is reducing our overall tax liability (lowering taxable income by amount of gambling loss from Schedule C).

[Vanessa · Accepted solution]

Yes, if your business is gambling then you can deduct the losses, but not an overall loss from wagering.  You can have losses from other aspects of the business though. 

https://www.journalofaccountancy.com/issues/2016/oct/taxes-for-gamblers.html

(Edited 2/13/19 @ 4:44PM)

[Zbucklyo]

And the burden of proof is on you to show you are a professional gambler.

[Hal_Al]

Simple answer: No

But it's possible, if your wife really does qualify as a business. It's a tough standard to meet and an topic of IRS scrutiny. 

reference: https://www.taxsamaritan.com/tax-preparation-services/gambler-tax-preparation/