Deductible Gambling Losses?

Not likely! Unfortunately the government has made it very difficult to deduct the losses incurred at those all too frequent casinos around metro Detroit. When you receive that lovely W-2G that indicates a taxable gambling win (and of course we know that all winning, even those that we don’t receive federal forms for are taxable), most people scramble for some record of losses to help offset that income that will be reported on the tax return. However what the IRS wants is written documentation such as for:
1. Bingo – Number of games, ticket costs.
2. Horse/dog racing – Record races, wagers, etc.
3. Keno – Copies of tickets, casino credit records.
4. Lottery – Record ticket purchases, and keep payment slips and unredeemed tickets.
5. Slot machines – Date, time, machine played, machine number.
6. Table games – Record table number.

Check with the casinos you typically frequent as to how they keep records. Sometimes slot machine/table game information needs to be retrieved each visit prior to leaving.

The IRS has taken a few taxpayers to court over this, and generally came out on the winning side when taxpayers did not keep adequate documentation of losses. And unfortunately the IRS expects you to net your wins and losses on a daily basis. The losses will show up as itemized deductions on your tax return as well. So although it’s difficult to write off those losses, it’s not impossible. And look on the bright side, not everyone wins enough to get a W-2G, so you must have had at least one good day!


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