California Gambling Loss Adjustment

[LCircuit]

The screen California Gambling Loss Adjustment is so confusing with no help examples associated with form.

I have winning of $10 and reported $10 as loss on federal return (max of winnings even though actual loss is $15, form doesn't allow more than winning i.e. $10) and I am taking standard deduction on federal. 

All my winnings and losses are in California.

Spent 25, won 10, net loss 15 - reported $10 winning and $10 loss on federal

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Form: California Gambling Loss Adjustment

You reported  gambling losses of $10.00 as a federal decuction.

These losses must be reduced if it includes California lottery losses or if this number exceeds your California taxable gambling income income.

Enter the greater of the California lottery losses included in your federal deduction or $-10 

Note: Enter any adjustment as a negative number. 

California Lottery Loss Adjustment  TBD

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Now the form for loss adjustment is Totally confusing. It talks about reducing losses if it contains CA losses. Federal loss reported does contain CA and its entire loss of $10 reported on federal. Then the OR statement "if this number exceeds your CA taxable gambling income" (it does exceed in reality however federal form only accepted same as winning so its same as winning).

Statement referring to  "Greater" with another option of -10 & indicating entering it as negative number is like pulling my hair (most likely most users).  Greater compared to what? (CA loss most likely can never be more than federal loss, if federal had CA + some other loss) & greater is always going to be positive and always greater than -10. Even 0 is greater than -$10

So wanted to know which value is expected out in Loss adjustment (which accepts only negative numbers or 0 )

1. 0
2. -10.00
3. -15.00 (actual net loss of $15 however limited to winning amount of $10)
4. -5.00 (difference of $10 reported on federal & net loss of $15)
5. Something else ughh

[RaifH]

California does not tax lottery winnings from the state of California. Therefore, they also do not allow deductions for losses on the California lottery. If you did not play the lottery and got your gambling winnings from other games, then you can leave the adjustment at 0. 

Let's take some examples. You win 20 in the California lottery and spent 15 doing it. You also went to the casino and won 15 and lost 5. Your federal winnings would be 35 and losses would be 20. Your California winnings would be 15 and 5. You would have to adjust the winnings by 20 and the losses by -15, which is the greater of -20 federal losses, or -15 which is your California lottery losses.  

If you win big at the casino and win 50 and don't lose anything but you spend 70 on California lottery tickets without winning anything, it would net out on your federal return. On your California return, you aren't allowed to take the deduction for lottery losses, so it would have to be adjusted by -50 which is the greater of -50 losses claimed federally or -70 actual California lottery losses. Your California winnings would be 50 with no losses to offset it. 

I agree that the wording leaves a little to be desired. 

[LCircuit]

Thanks @RaifH 

Sorry should have indicated mine were all lottery winning and loss. 

Spent 25, won 10, net loss 15 (all lottery)

- reported $10 winning and $10 allowable loss on federal

- For CA, winning $10, So CA loss adjustment should be -10 (let me know if this is wrong)

[DMarkM1]

Yes, you are correct.  The CA loss adjustment is -10 which is the negative of the federal deduction amount (10).