deleting post- bad recomendations by users ignoring tax code

[CuriousWhale]

deleting post- bad recomendations by users ignoring tax code

[DoninGA]

The article is correct - https://turbotax.intuit.com/tax-tips/jobs-and-career/how-to-pay-taxes-on-gambling-winnings-and-losse...

Total Winnings are reported as income on a tax return regardless of the amount of losses incurred in gambling.  Losses are reported on Schedule A as an itemized Miscellaneous deduction.  Losses reported cannot be more than winnings.

Further down the article it is noted how to report the losses -

You can deduct your losses…to an extent

You can’t deduct the cost of your wager from your winnings when determining how much you won, but you can deduct your gambling losses subject to certain rules.

• You must itemize your deductions to claim your gambling losses as a tax deduction.
• This means you can’t take the standard deduction for your filing status, which often amounts to more than a taxpayer’s itemized deductions.

You’re allowed to deduct losses only up to the amount of the gambling income you claimed. So if you won $2000 but lost $5,000, your itemized deduction is limited to $2,000. You can’t use the remaining $3,000 to reduce your other taxable income. You have to claim $2,000 in income on your Form 1040 and then separately claim $2,000 as an itemized deduction.

[CuriousWhale]

No, the article is wrong. The revenue ruling is part of the **bleep** tax code and is crystal clear on defining what is reported. How are you disregarding the tax code for a TurboTax opinion?

[DoninGA]

See IRS Memorandum from 2008 - https://www.irs.gov/pub/irs-utl/am2008011.pdf

A casual gambler who elects to itemize deductions may deduct wagering
losses, up to wagering gains, on Form 1040, Schedule A. In this case, the taxpayer
may deduct only $350 of her $610 of wagering losses as an itemized deduction. A
casual gambler who takes the standard deduction rather than electing to itemize may
not deduct any wagering losses. See Rev. Rul. 54-339, 1954-2 C.B. 89

See IRS Publication 17 page 104 - https://www.irs.gov/pub/irs-pdf/p17.pdf#page=104

You can't reduce your gambling winnings by your gambling losses and report the difference. You must report the full amount of your winnings as income and claim your losses (up to the amount of winnings) as an itemized deduction. Therefore, your records should show your winnings separately from your losses.

[CuriousWhale]

You  clearly didnt spend the time to read that memo.

How they actually calculate the gains and losses is based on the exact method i posted which is EXCLUDING basis.....

[CuriousWhale]

You  clearly didnt spend the time to read that memo. How they actually calculate the gains and losses is based on the exact method i posted which is EXCLUDING basis.....

Please notice below in the memo you linked how its being calculated.... CLEARLY they are backing out basis.

The better view is that a casual gambler, such as the taxpayer who plays the
slot machines, recognizes a wagering gain or loss at the time she redeems her
tokens. We think that the fluctuating wins and losses left in play are not accessions to
wealth until the taxpayer redeems her tokens and can definitively calculate the amount
above or below basis (the wager) realized. See Commissioner v. Glenshaw Glass
Co., 348 U.S. 426 (1955). For example, a casual gambler who enters a casino with
$100 and redeems his or her tokens for $300 after playing the slot machines has a
wagering gain of $200 ($300 - $100). "

[DoninGA]

You are free to argue this with the IRS when reporting your gambling winnings.

However, since the IRS states this cannot be done in IRS Publication 17 Your Federal Income Tax For Individuals (2021) on page 104 that is how TurboTax will recommend reporting gambling income and losses.

[CuriousWhale]

You are also free to deflect your position.

The IRS has made it clear that basis is excluded in all of the relevant articles.

No one is arguing winnings and losses reported seperately.

its VERY clear that basis is excluded. Your own links clearly defined that, this is a very lazy deflection by you.

[CuriousWhale]

AND to further clarify Page 104 of this packet IS ONLY speaking to basis OF Losing Wagers.

You litterally are ignoring the tax code. Your own articles YOU posted are clearly backing out basis. Why are you ignorning the fact that your own article is including basis?

[Critter-3]

After 30 years as a tax pro + 8 years of teaching the income tax prep course, I can concur with the TT FAQ ... this has always been the rule.  If you want to enter less than what was reported on a W-2G   then by all means do so and when the CP2000 notice shows up in a couple years you can have this debate with the IRS so keep good records to support your position. 

Now the Rev code you sited has to do with the netting of the slot machine payout that you take to the window to cash out.  If you put in 100 and get out 5000 then the casino will report the 5000 and so must you.  On your return you can deduct the 100 on the Sch A if you itemize.  Same thing if you had put in 5000 but only cashed out 100 ... 100 is the winnings  and the 5000 is reported on the Sch A.    Most casinos will give you a printout (Commonly referred to the win/loss statement)  if requested to use to support your position.  

[CuriousWhale]

This has not always been the rule, this has been what you believe to be the rule.

It is literally defined in the TAX CODE. Basis of a Wager is excluded from Wagering Gains. I posted the revenue rule ( WHICH is part of the tac code). It is defined in there. Not one person has posted anything that can discredit the ACTIVE revenue rule.

This literally has 0 to do with a W2G. W2Gs are irrelavent to this point.

[CuriousWhale]

no the revenue rule i posted is not referencing slots. That is a memo.

If you actually look at the revenue rule it is clear. Go look up that EXACT revenue rule in the tax code. 

And even if you want to site that MEMO. The MEMO is clear in saying that basis is excluded. I dont understand how people cant see that it is CLEARLY WRITTEN in there.

"In ordinary parlance, a wagering “gain” means the amount won in excess of the amount bet
(basis). See Rev. Rul. 83-103, 1983-2 C.B. "

[CuriousWhale · Accepted solution]

this in plain text word for word from the IRS

"In ordinary parlance, a wagering “gain” means the amount won in excess of the amount bet
(basis). See Rev. Rul. 83-103, 1983-2 C.B. "

The revenue rule itself gives the litteral example . A better who places a $20 wager and wins $100,000 has a wagering gain of $99,800 and that is what would be classified as income.

The revenue rule is part of the tax code. The tax code is the land of the law. I am trying to understand what you are saying to discredit the revenue rules of the tax code.

[DoninGA]

You are referring to gambling sessions where you track your total winnings and losses per session and net the gain or loss.  Then adding up all sessions for the year for winning sessions and losing sessions.

See this website for extremely detailed information and reporting procedures which also include completing a Form 8275 (Disclosure Statement) and gambling diary information with the tax return - https://www.morrellawpllc.com/tax-preparation-and-resolution/taxation-of-recreational-gamblers-an-ov...

[CuriousWhale]

Stop ignorning my actual point. Ignore the memo for a second.

this in plain text word for word from the IRS revenue rule. WHICH IS TAX LAW.

See Rev. Rul. 83-103, 1983-2 C.B. "

The revenue rule itself gives the litteral example . A better who places a $20 wager and wins $100,000 has a wagering gain of $99,800 and that is what would be classified as income.

The revenue rule is part of the tax code. The tax code is the land of the law. I am trying to understand what you are saying to discredit the revenue rules of the tax code.