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US Tax Question - 1099-MISC income offset w gambling losses

#1

<Made a statement recently to the effect that it>
<doesn't make sense to pay>
<down your mortgage as you'll need to file a>
<Schedule A to claim gambling losses.>
<If the mortgage is paid off, then you'll need to>
<give up standard deduction to>
<claim losses as most people won't have enough>
<deductions to normally file>
<Schedule A without mortgage interest deducts.>

<That was my gut feel. Now I'm wondering if a case>
<can be made for paying off>
<the mortgage especially in these low-interest times?>

<Any tax experts want to noodle this one out?>

I'm not a tax expert but I have some knowledge of the
tax laws. If you file gambling losses (Cannot exceed
gambling wins) you have to file Schedule A regardless
of whether you have mortgage interest or not. When you
fill out sch A if the total of all your allowable
deductions exceed the standard deduction you get to
deduct the total if not you get to deduct the standard
deduction.

For most people mortgage interest is their biggest
deduction and puts them above the standard deduction
unless their mortgage is almost paid off. Video poker
players who play regularly will accumulate gambling
losses to offset their wins that will for many exceed
their mortgage interest.

IMO the best question is: Can I invest the amount it
takes to pay off my mortgage, at a higher rate of
return than the interest rate on my loan?

Before the Stock market decline in 2000 many
investment analyst were suggesting buying stocks or
mutual funds instead of paying off their mortgage.
Some were advising that you should borrow more money
on the equity in your home so you could make a lot
more in the stock market.

I paid off my mortgage and now I'm glad I did.

I'm not sure about Turbo Tax but I would guess that to
make it more complete that added more gambling
information. As far as I know the tax laws concerning
gambling wins/losses hasn't changed.

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#2

I'm not a tax expert but I have some knowledge of the
tax laws. If you file gambling losses (Cannot exceed
gambling wins) you have to file Schedule A regardless
of whether you have mortgage interest or not. When you
fill out sch A if the total of all your allowable
deductions exceed the standard deduction you get to
deduct the total if not you get to deduct the standard
deduction.

Does the above agree with the below?

For most people mortgage interest is their biggest
deduction and puts them above the standard deduction
unless their mortgage is almost paid off. Video poker
players who play regularly will accumulate gambling
losses to offset their wins that will for many exceed
their mortgage interest.

It would seem to me (not a tax expert) that if your itemized
deductions are less than standdard deduction then std ded. is the
way to go. If I understand what everyone says, it is that at best
you can offset wins by an equal amount of losses. So your net would
be zero from gambling. Therefore what is left is what you have to
itemize or std deduction which ever is greater.

I have tried to ask this question a couple of times on various
boards and of some of the regular gambling writers and have never
got an answer that made sense.

Somebody straighten us out.

DWK

#3

Your missing the point I believe. In-order to write off losses
against wins, you MUST use schedule A and your losses are entered
under misc deductions. If you use schedule A, you can't take the
standard deduction. If for instance you have 10,000 in W2G's, and
have at least that amount of losses, you can write off that 10 grand
on schedule A but get no credit for being a living, breathing human
being if you otherwise would have used the standard deduction.

It would seem to me (not a tax expert) that if your itemized
deductions are less than standdard deduction then std ded. is the
way to go. If I understand what everyone says, it is that at best
you can offset wins by an equal amount of losses. So your net

would

be zero from gambling. Therefore what is left is what you have

to

···

itemize or std deduction which ever is greater.

I have tried to ask this question a couple of times on various
boards and of some of the regular gambling writers and have never
got an answer that made sense.

Somebody straighten us out.

DWK

#4

Your missing the point I believe. In-order to write off losses
against wins, you MUST use schedule A and your losses are entered
under misc deductions. If you use schedule A, you can't take the
standard deduction. If for instance you have 10,000 in W2G's, and
have at least that amount of losses, you can write off that 10

grand

on schedule A but get no credit for being a living, breathing

human

being if you otherwise would have used the standard deduction.

> It would seem to me (not a tax expert) that if your itemized
> deductions are less than standdard deduction then std ded. is

the

> way to go. If I understand what everyone says, it is that at

best

> you can offset wins by an equal amount of losses. So your net
would
> be zero from gambling. Therefore what is left is what you have
to
> itemize or std deduction which ever is greater.
>
> I have tried to ask this question a couple of times on various
> boards and of some of the regular gambling writers and have

never

> got an answer that made sense.
>
> Somebody straighten us out.
>
> DWK

Yes, I knew that (either itemize or standardize, but not both). Did
not express myself very good. Been away for a few days so just
getting back. It gets very complicated. Best thing to do is work
it out both ways, using estimates if you have to.

DWK

···

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