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?

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).

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1 Best answer

Level 3

Jun 1, 2019 10:40:23 AM

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)

Level 3

Jun 1, 2019 10:40:23 AM

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)

Level 9

Jun 1, 2019 10:40:29 AM

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

Level 15

Jun 1, 2019 10:40:31 AM

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/

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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?