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Are Lotto Losings Tax Deductible?

Topic closed. 11 replies. Last post 7 years ago by BevsPicks2.

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United States
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May 24, 2006
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Posted: March 27, 2007, 2:38 pm - IP Logged

Fellow Forum Members,

I'm not an accountant, and I know next to nothing about tax law. But I remember hearing some where never to throw away your losing lotto ticket slips because they can be claimed in ones' taxes as a loss.  So if I spent $1000 on the lottery last year, and I won $400 and lost $600, do I legally have the right to declare a $600 lost in my tax form?  I would really appreciate hearing back from anyone with an expert opinion on this matter.  I have all of my ticket slips from last year saved and wondering what to do next before April 15.  Thanks.

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    Kentucky
    United States
    Member #32652
    February 14, 2006
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    Posted: March 27, 2007, 5:16 pm - IP Logged

    Fellow Forum Members,

    I'm not an accountant, and I know next to nothing about tax law. But I remember hearing some where never to throw away your losing lotto ticket slips because they can be claimed in ones' taxes as a loss.  So if I spent $1000 on the lottery last year, and I won $400 and lost $600, do I legally have the right to declare a $600 lost in my tax form?  I would really appreciate hearing back from anyone with an expert opinion on this matter.  I have all of my ticket slips from last year saved and wondering what to do next before April 15.  Thanks.

    You can only deduct the amount of the winnings and you probably didn't have to fill out an IRS form for winning $400. 

    Had you won $10,000, you have to declare that as income, but you can deduct up to $10,000 only by going long form (schedule A).  Next year after hitting the pick-4 a couple of times, get a tax program and compare the difference between going long form and taking the standard deductions.

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      Coastal Georgia
      United States
      Member #2653
      October 30, 2003
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      Posted: March 27, 2007, 5:29 pm - IP Logged

      You can only deduct the amount of the winnings and you probably didn't have to fill out an IRS form for winning $400. 

      Had you won $10,000, you have to declare that as income, but you can deduct up to $10,000 only by going long form (schedule A).  Next year after hitting the pick-4 a couple of times, get a tax program and compare the difference between going long form and taking the standard deductions.

      Correct..

      I had $3000 in 1099-G winnings and claimed the maximum allowed in losses for me, which was $3000 .

      I have tickets to substantiate it.

       

      DD

       

                                     

                    

       

       


        United States
        Member #17555
        June 22, 2005
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        Posted: March 27, 2007, 6:25 pm - IP Logged

        I thought you could only deduct the losing tickets from the total of taxes held from a large win.

        If for example, the tax on your jackpot was 100,000.00, and you have 70,000.00 in losing tickets, they'd only deduct 30,000.00 from your jackpot prize.

        I have about 100 boxes in the garage stuffed with tickets. I say about 300,000 give or take a few thousand.

        I think I'll cashem in someday. It'll be my IRA account.

          guesser's avatar - Lottery-017.jpg

          United States
          Member #41383
          June 16, 2006
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          Posted: March 27, 2007, 10:33 pm - IP Logged

          I thought you could only deduct the losing tickets from the total of taxes held from a large win.

          If for example, the tax on your jackpot was 100,000.00, and you have 70,000.00 in losing tickets, they'd only deduct 30,000.00 from your jackpot prize.

          I have about 100 boxes in the garage stuffed with tickets. I say about 300,000 give or take a few thousand.

          I think I'll cashem in someday. It'll be my IRA account.

          How can you do that when they must be redeemed within 6 months ?

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            Kentucky
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            February 14, 2006
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            Posted: March 27, 2007, 11:39 pm - IP Logged

            Correct..

            I had $3000 in 1099-G winnings and claimed the maximum allowed in losses for me, which was $3000 .

            I have tickets to substantiate it.

             

            DD

            I worked with a guy that won $100,000 and told me he deducted the entire amount because his tax lady told him he could. I never heard if he was audited but had he been, he would have to prove $100,000 in gambling losses.

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              Kentucky
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              Posted: March 27, 2007, 11:55 pm - IP Logged

              I thought you could only deduct the losing tickets from the total of taxes held from a large win.

              If for example, the tax on your jackpot was 100,000.00, and you have 70,000.00 in losing tickets, they'd only deduct 30,000.00 from your jackpot prize.

              I have about 100 boxes in the garage stuffed with tickets. I say about 300,000 give or take a few thousand.

              I think I'll cashem in someday. It'll be my IRA account.

              The total amount of the jackpot is taxable income. In your example if you won $100,000, you could deduct $70,000 in gambling losses because you have the tickets to prove it. Sweet talk Justx into giving you another $30,000 in losing tickets and you can claim up to $100,000.

              Losing tickets are only good for the taxable year so you might consider getting rid of the tickets dated 1987.

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                NY
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                Posted: March 28, 2007, 1:43 am - IP Logged

                I thought you could only deduct the losing tickets from the total of taxes held from a large win.

                If for example, the tax on your jackpot was 100,000.00, and you have 70,000.00 in losing tickets, they'd only deduct 30,000.00 from your jackpot prize.

                I have about 100 boxes in the garage stuffed with tickets. I say about 300,000 give or take a few thousand.

                I think I'll cashem in someday. It'll be my IRA account.

                As others have said, in your example the entire $100,000 would be part of your taxable gross income, but you could deduct losses for the same year  up to the full $100,000 if you could actually prove that you had wagered and lost that much. Despite their reputation as mean, nasty and completely unreasonable, if somebody wins and claims a deduction of less than $1000 an auditor probably isn't going to be too demanding about the "proof" you offer. OTOH, if somebody is being audited and they produce 300,000 tickets the auditor is going to laugh themselves silly and then ignore the tickets and refuse the deduction unless  there is more substantial proof. If they want to get picky about smaller numbers of tickets, they're well aware that people have been collecting losing tickets for years and that more recently people have tried this sort of thing: http://tinyurl.com/29xvqw.

                Anyone who thinks taxes on lottery winnings are too high to pay should look into the penalties for tax evasion, which is sometimes measured in months or years instead of dollars.


                  United States
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                  Posted: March 28, 2007, 1:00 pm - IP Logged

                  How can you do that when they must be redeemed within 6 months ?

                  The tix I have are within one month. I still have 5 months to go.

                    guesser's avatar - Lottery-017.jpg

                    United States
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                    June 16, 2006
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                    Posted: March 28, 2007, 7:01 pm - IP Logged

                    I have about 100 boxes in the garage stuffed with tickets. I say about 300,000 give or take a few thousand.

                     

                    You have played that many games in the last month ???  (I am assuming PB, I am wrong I take it ?)

                    Still, I thought all tickets expired a year after issue ? 

                      guesser's avatar - Lottery-017.jpg

                      United States
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                      Posted: March 28, 2007, 7:03 pm - IP Logged

                      I was trying to figure out how to DEDUCT $100,000 in WINNINGS.......... but you are correct: He'd have to prove 100K in losses.........

                      I wish I had that 'problem'. 

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                        EAST COAST, USA
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                        January 31, 2007
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                        Posted: March 28, 2007, 7:06 pm - IP Logged

                        I was trying to figure out how to DEDUCT $100,000 in WINNINGS.......... but you are correct: He'd have to prove 100K in losses.........

                        I wish I had that 'problem'. 

                        I Agree!