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Level 1

Do scratch off losses count as gambling losses?

I like to play scratch offs and recently learned gambling losses can be deducted as much as winnings. I was wondering if scratch offs count because they are a lottery and how much information would the IRS need to accept them, because you can only buy them with cash.
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Employee Tax Expert

Do scratch off losses count as gambling losses?

Yes, scratch off tickets can count as gambling losses - but there is a catch.  First, you cannot deduct them without claiming any winnings.  For tax purposes, you can only deduct losses up to the amount of your winnings. Secondly, they are part of your itemized deductions. If you don't claim any mortgage interest, real estate taxes, state income tax, charitable, medical expenses etc., gambling losses will not impact your tax return at all.

As to the information needed - you would have to have receipts for the tickets purchased, since they are purchased by cash only. 

5 Replies
Highlighted
Employee Tax Expert

Do scratch off losses count as gambling losses?

Yes, scratch off tickets can count as gambling losses - but there is a catch.  First, you cannot deduct them without claiming any winnings.  For tax purposes, you can only deduct losses up to the amount of your winnings. Secondly, they are part of your itemized deductions. If you don't claim any mortgage interest, real estate taxes, state income tax, charitable, medical expenses etc., gambling losses will not impact your tax return at all.

As to the information needed - you would have to have receipts for the tickets purchased, since they are purchased by cash only. 

Level 1

Do scratch off losses count as gambling losses?

Would holding on to the loosing tickets also count instead of a receipt?
Employee Tax Expert

Do scratch off losses count as gambling losses?

No, because they don't show payment, unfortunately.
Level 1

Do scratch off losses count as gambling losses?

How in the world can you show loss? No one gives you a receipt for purchasing a scratch off ticket.  I have the loosing tickets and of course I had to buy them before they became a losing ticket?
Level 1

Do scratch off losses count as gambling losses?

I agree, you don't get receipts for losing tickets, you just purchase them