"Free" sweepstakes coins

[brian134]

I played black jack at an online casino.  I purchased packages (over time) that cost me $4000.  The purchase gave me what the casino called Gold coins (valueless) and Sweeps coins -playable, then redeemable for cash.
I ended up cashing out for $4800.  That is a win of $800 in my mind.  I was surprised to receive a 1099-MISC from the casino for $4800 as "other income".   Do I claim the $4800 as gambling winnings not reported on a W2G and then $4000 as a gambling loss when I itemize?   When I entered the 1099-MISC as income, it subtracted $1160 from my "refund" amount.  Talk about a bad gamble if that's the bill I end up with.

[LeticiaF1]

Yes, you are correct, you need to enter the 1099-MISC as income and then claim the $4800 as gambling losses when you itemize.  Gambling winnings should be reported on Form 1040 Schedule 1 on Line 8 as Other Income.  Gambling losses can only be deducted up to the amount of the gambling winnings.  Losses should be reported on Form 1040 Schedule A as a Other Itemized Deductions.  

To make a difference in your tax return, your gambling losses plus any other itemized deductions must be greater than the standard deduction for your filing status to make a difference on your taxable income.   For more information refer to How to Pay Taxes on Gambling Winnings and Losses.