I am not a lawyer, I am not an accountant, I am not an IRS enrolled agent, I am not a tax preparation specialist. I couldn’t give advice, and you would have no reason to listen if I did.
I believe the overwhelming, effectively unanimous consensus among people who actually do know what they are talking about (once again, I am not such a person), is that the filer in question would be obliged to report the sum of all of his winning sessions, taken individually, as “other income.” The exact meaning of what constitutes a “session” is open for some dispute, but certainly no less than one each gaming day at a particular casino. In addition, the filer in question would be permitted to report the sum of all of his losing sessions, up to be not exceeding the sum of all of his winning sessions, as an itemized deduction on a Schedule A; of course, this would mean forgoing the standard deduction, which could well exceed said some, in which case the filer would be money ahead by taking the standard deduction instead of itemizing.
As far as I know, no responsible commentators on gambling taxes would advise someone whose yearly total losses exceed his or her yearly total wins to chalk it up to a losing year and fail to report anything. Especially considering the issuance of a W2-G for a jackpot, such a strategy would be doomed to getting seriously crosswise with the IRS.
Again: I am not a lawyer, I am not an accountant, I am not an IRS enrolled agent, I am not a tax preparation specialist. I couldn’t give advice, and you would have no reason to listen if I did.
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On Sat, Mar 9, 2019 at 3:54 PM melbedewy1…@…com [vpFREE] <vpF…@…com> wrote:
My ne’er do well cousin is 44 years old, delivers pizza for a living and spends all his excess money on cigarettes and beer. He makes barely enough money to file a tax return and obviously does not itemize.
For the last several years he has taken his parents on a weekly basis to the local casino. The parents are upper middle class, pay reasonably high stake slots and itemize- with their jackpot wins easily offset by their total losses. They also keep a diary as does the son, at their insistence. They throw him $200 to play with. Sometimes he scratches up a 20 dollar bill or 2 to add to his stake. They then go to a restaurant in the casino before heading home.
Back in August he hit an Adorned Peacock jackpot for about $1250 and got a tax form. However both his diary and the records from the casino show that he is, even when factoring in the jackpot, a LOSER for the year.
Several tax preparers have each given different “advice”.
I am an attorney but have no knowledge of tax law. My best opinion is that all gambling winnings are taxable and the jackpot tax form is not some separate taxable trigger but rather since both his legitimate diary and casino records show a total LOSS for the calendar year he need not report any “gambling win”, since he has none.
Any comments welcome.
