1099-K and online gambling questions

[testitout]

My withdrawals/deposits were done through paypal for online gambling, so rightfully so I received a 1099-K. Some questions I have:

1. Do I enter the 1099-K AND enter in my wins/losses in the gambling section? It would appear I would be double taxed on it then. Or should I just enter in the correct info in the gambling section and then enter in adjustments to deduct the true gambling portion?

2. Am I able to itemize my deposits as gambling losses? (This way I would be taxed on net winnings).

3. For state taxes, my deductions aren't showing up when I try to do #2 above.

4. I also received a 1099-NEC and was paid partially through Paypal, so the income is reported on both the 1099-K and 1099-NEC. Can I make additional adjustments to the 1099-K form so that the overlapping income isn't taxed twice?

[DaveF1006]

Enter the 1099K for gambling in the gambling section. Report it as income received not on a W2G.  Then it asks for the gambling income not reported on the W2G and then there will be a box that will allow you to enter your gambling losses up to the amount of your winnings. If you can itemize your deductions for the year, this will offset your gambling income. You will make no adjustment for this. 

Don't enter this as a 1099K in that section because there is no way to enter your gambling losses without gambling income to support it. It must be reported in federal>wages and income>less common income>gambling winnings

As far as the state taxes, do you have enough to itemize to take advantage of the deduction? Also your state may not allow gambling losses thus you may need to check with your State Dept of Revenue to see if this is the case.

Regarding the 1099 NEC or 1099K, are you certain there is overlapping income or is the correct amount of your income split evenly between the two forms? Use caution when trying to make adjustments if you feel there is overlapping income as these could raise red flags with the IRS.

[testitout]

After entering in my net gambling winnings via your method listed above, my issue with the state return resolved itself. I most certainly have enough deductions to itemize and NJ thankfully counts gambling losses.

As for your final question, yes. The 1099-K sent by PayPal has total $ received for each month. Since I quit gambling by July, the few payments I received in the latter half of the year corroborate with the amount on my 1099-NEC. I guess if I don’t enter the 1099-K as above, then entering in the 1099-NEC wouldn’t result in that money being double taxed.

[DMarkM1]

Correct.  If you enter the gambling portion of the 1099K in the "Gambling" topic and then enter the 1099-NEC for the remainder there would not be any double taxation.