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Taxes

Topic closed. 24 replies. Last post 10 months ago by destinycreation.

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New Member

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February 17, 2016
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Posted: February 17, 2016, 5:06 pm - IP Logged

Hello,

We won a total of $45,000 in lottery winnings and casino winnings. I've saved all of my losing scratch offs for the year and kept a diary of our casino trips. We have more than enough to write off all of the winnings.

Has anyone wrote off losing scratch off tickets? Any advice? They are true losses and I hate to pay the IRS a crap load of money.

Thanks!!

    TheMeatman2005's avatar - lightening
    Brooklyn, NY
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    Member #169723
    October 29, 2015
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    Posted: February 17, 2016, 5:40 pm - IP Logged

    Hello,

    We won a total of $45,000 in lottery winnings and casino winnings. I've saved all of my losing scratch offs for the year and kept a diary of our casino trips. We have more than enough to write off all of the winnings.

    Has anyone wrote off losing scratch off tickets? Any advice? They are true losses and I hate to pay the IRS a crap load of money.

    Thanks!!

    copied from https://www.irs.gov/taxtopics/tc419.html

    Topic 419 - Gambling Income and Losses

    The following rules apply to casual gamblers. Gambling winnings are fully taxable and you must report them on your tax return. Gambling income includes but is not limited to winnings from lotteries, raffles, horse races, and casinos. It includes cash winnings and the fair market value of prizes, such as cars and trips. For additional information, refer to Publication 525, Taxable and Nontaxable Income, or review Do I Need to Claim My Gambling Winnings and Can I Deduct My Gambling Losses?

    Gambling Winnings

    A payer is required to issue you a Form W-2G (PDF), Certain Gambling Winnings, if you receive certain gambling winnings or if you have any gambling winnings subject to federal income tax withholding. You must report all gambling winnings on your Form 1040(PDF) as "Other Income" (line 21), including winnings that are not subject to withholding. In addition, you may be required to pay an estimated tax on your gambling winnings. For information on withholding on gambling winnings, refer to Publication 505, Tax Withholding and Estimated Tax. If you are considered a nonresident alien of the United States for income tax purposes and you have to file a tax return, you must use Form 1040NR (PDF), U.S. Nonresident Alien Income Tax Return. Refer to Publication 519, U.S. Tax Guide for Aliens, and Publication 901, U.S. Tax Treaties, for more information.

    Gambling Losses

    You may deduct gambling losses only if you itemize deductions. However, the amount of losses you deduct may not be more than the amount of gambling income reported on your return. Claim your gambling losses on Form 1040, Schedule A (PDF) as an "Other Miscellaneous Deduction" (line 28) that is not subject to the 2% limit. A nonresident alien of the United States cannot deduct gambling losses.

    Recordkeeping

    It is important to keep an accurate diary or similar record of your gambling winnings and losses. To deduct your losses, you must be able to provide receipts, tickets, statements, or other records that show the amount of both your winnings and losses. Refer toPublication 529, Miscellaneous Deductions, for more information.

    The Meatman

    “The quickest way to double your money is to fold it in half and put it in your back pocket.” Will Rogers

    Winning happens in a flash, Like A Bolt Of Lightning!  Patriot

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      Posted: February 17, 2016, 7:12 pm - IP Logged

      So when I read "must be able to provide receipts, tickets" I interpret it as being able to use my losing scratch off tickets. What is your opinion on how that could be interpreted?

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        Arizona
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        Posted: February 17, 2016, 7:21 pm - IP Logged

        If the scratch off ticket has the sale price printed on it (I believe they generally do) and is visibly not a winner, it should suffice as a "record" of your loss.

         

        I am not a lawyer or tax expert. I suggest consulting a professional. You can clearly afford it.

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          New Member

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          Posted: February 17, 2016, 7:49 pm - IP Logged

          Thank you for the replies. I've been told that I can't do it and I've been told that I can do it. I just don't want to get down the road and get audited and be accused of fraud. All of my losses are true losses and it makes the difference between paying $5100 or receiving back $3100.

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            Tulsa
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            Posted: February 17, 2016, 8:00 pm - IP Logged

            It is not a dollar for dollar tradeoff between winnings and what you can write off.

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              Posted: February 17, 2016, 8:11 pm - IP Logged

              I ran numbers. A standard deduction puts us owing $5100. If I itemize and deduct my gambling losses against all of my gambling winnings, my refund is $3100 (give or take a few dollars).

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                Tulsa
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                Posted: February 17, 2016, 8:14 pm - IP Logged

                I ran numbers. A standard deduction puts us owing $5100. If I itemize and deduct my gambling losses against all of my gambling winnings, my refund is $3100 (give or take a few dollars).

                That is a rather large swing.  Did you lose a lot gambling?

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                  New Member

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                  Posted: February 17, 2016, 8:22 pm - IP Logged

                  Yes. I have 45,000 in winnings and I have over 45000 in losses ( of course I can only write off up to how much I won through w2-g's.

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                    Tulsa
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                    Posted: February 17, 2016, 8:46 pm - IP Logged

                    I'm glad you kept track of all of your losses.  Sounds like a pretty exciting year overall.

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                      Posted: February 17, 2016, 8:51 pm - IP Logged

                      It was an exciting year. Just nervous about using my losing scratch offs to deduct losses since I've been told that I can't and can.

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                        Tulsa
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                        Posted: February 17, 2016, 9:29 pm - IP Logged

                        It was an exciting year. Just nervous about using my losing scratch offs to deduct losses since I've been told that I can't and can.

                        Do you have a lot in scratch off losses?

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                          Posted: February 17, 2016, 9:39 pm - IP Logged

                          Yes. I counted one bag so far with around $9000 in losing tickets. I still have another bag to add to it which will put me way over my $45000 in winnings in addition to my losses at the casino.

                            TheMeatman2005's avatar - lightening
                            Brooklyn, NY
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                            October 29, 2015
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                            Posted: February 17, 2016, 9:47 pm - IP Logged

                            Yes. I counted one bag so far with around $9000 in losing tickets. I still have another bag to add to it which will put me way over my $45000 in winnings in addition to my losses at the casino.

                            I had not noticed earlier, but I see that you are a new member....Welcome to LP

                            Did you at least pay off some if not all of bills you might have owed before spending the proceeds of your win?

                            What did you win the 45k on?

                            The Meatman

                            “The quickest way to double your money is to fold it in half and put it in your back pocket.” Will Rogers

                            Winning happens in a flash, Like A Bolt Of Lightning!  Patriot

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                              Tulsa
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                              February 7, 2016
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                              Posted: February 17, 2016, 9:47 pm - IP Logged

                              My fingers would be bleeding from all of that scratching.  Also, that is a lot of scratch spent on those tickets.