Social Casino Tax deduction

[Austinrassle52]

So I had bad year playing social casinos online. 

I won around 95,000, but lost over 150,000.

I have all my purchase statements from each social casino, my gambling log organized by day session and casino, and all my bank/credit card transactions for withdrawals and deposit organized by month. 

Am I able to deduct my purchases from the social casino as gambling losses? 

[xmasbaby0]

Ouch.

Gambling

To enter the W-2G  or other documents For your Gambling winnings--Go to Federal>Wages & Income>Less Common Income>Gambling Winnings

You can enter your winnings, and then keep clicking through the interview to enter gambling losses.

https://www.irs.gov/help/ita/how-do-i-claim-my-gambling-winnings-and-or-losses

Gambling winnings are taxable income.  Losses are an itemized deduction.  If you do not have enough itemized deductions to exceed your standard deduction, your losses will have no effect.

https://blog.turbotax.intuit.com/income-and-investments/how-are-gambling-winnings-taxed-8891/

2024 STANDARD DEDUCTION AMOUNTS

SINGLE $14,600    (65 or older/legally blind + $1950)

MARRIED FILING SEPARATELY $14,600    (65 or older/legally blind + $1550)

MARRIED FILING JOINTLY $29,200    (65 or older/legally blind + $1550)

HEAD OF HOUSEHOLD $21,900    (65 or older/legally blind + $1950)

[Austinrassle52]

So the fact that it's a social casino doesn't affect the fact that I can deduct the purchases as losses?

I know it's kind of niche question, I've seen most CPA responses say yes, but just trying to get extra clarification. I'd hate to get audited and them come back and say you can't 

[PatriciaV]

The IRS considers all gambling income to be taxable. If you can document your losses, you can report those on your tax return as itemized deductions. This is true no matter what kind of gambling was involved.

[Mtbmike83]

Hey, 

   I have found myself in a similar situation. I actually made the decision to hire a tax lawyer due to the fact you cannot get a clear answer on this. Since most of these websites include your purchases in their reported winnings the thought of not being able to write off your purchases as losses is would be catastrophic.

[Deeder0408]

Please clarify. Does this apply to online "social casinos" using a SWEEPSTAKES model (like Chumba casino). If one spends more (real $) to get sweeps coin "gift bonuses" than they win can the amount lost be claimed on taxes as a gambling loss? Or are all cash winnings considered "sweepstakes" prizes and cannot claim any losses?

[Austinrassle52]

Yeah,  I meant social sweepstakes casinos like chumba.

[Austinrassle52]

Yeah,  I'd love to know what you hear back.

[Mtbmike83]

Will do. After meeting with him this week, he is fairly confident the IRS will view all money used to purchase SC packages can be itemized as a lose. When buying a package for 25 bucks but they give you 50 sc bucks, he believes 25 bucks of that will be viewed as free play due to the fact it is more than the dollar amount you put in. Unfortunately, not all social casinos provide detailed enough records for me to determine this for all of my gaming. I'm also paying a CPA with the law firm to file my taxes as this seems to be a convoluted gray area and if I can't write off losses I could be looking at upwards of 300k of alleged winnings that is not accurate due to the fact the social casinos lump in your purchases with your winning when you cash out.