JackieCPA Posted March 13, 2020 Report Share Posted March 13, 2020 I either need an opinion or a fact. I cannot find anything that shows exactly my answer wherever I look. So I have a client, who won a big contest at a casino. The winnings were reported on 1099-Misc "Other income". The ticket for the contest is free if you gamble at their casino. He feels he should be able to deduct his losses from that day on Schedule A because he wouldn't have received a free ticket if he wasn't gambling. It feels like a gray area to me, because the ticket was really free. Any thoughts? Quote Link to comment Share on other sites More sharing options...
ILLMAS Posted March 13, 2020 Report Share Posted March 13, 2020 See IRS p4706 You Won, page 2 example Quote Link to comment Share on other sites More sharing options...
Yardley CPA Posted March 13, 2020 Report Share Posted March 13, 2020 If he can substantiate the losses, why wouldn't you reflect them on Schedule A as an itemized deduction? Quote Link to comment Share on other sites More sharing options...
Abby Normal Posted March 13, 2020 Report Share Posted March 13, 2020 2 hours ago, Yardley CPA said: If he can substantiate the losses, why wouldn't you reflect them on Schedule A as an itemized deduction? Because prize drawings are not gambling. That's why it's not on a W2G. 4 Quote Link to comment Share on other sites More sharing options...
grandmabee Posted March 13, 2020 Report Share Posted March 13, 2020 I agree it is a prize not gambling, that is why it is in box 3 other income. no losses to offset. Quote Link to comment Share on other sites More sharing options...
Yardley CPA Posted March 13, 2020 Report Share Posted March 13, 2020 1 hour ago, Abby Normal said: Because prize drawings are not gambling. That's why it's not on a W2G. I interpreted it as gambling. Good to know. Thank you. Quote Link to comment Share on other sites More sharing options...
NECPA in NEBRASKA Posted March 14, 2020 Report Share Posted March 14, 2020 I had a lady that NEVER won at poker, but won prizes every year. She would fight me and get so mad, because the manager there told her that she could deduct her huge losses against it. I told her to ask him to prepare her return, but she stayed with me until she passed away. Quote Link to comment Share on other sites More sharing options...
Max W Posted March 14, 2020 Report Share Posted March 14, 2020 After he won the money, I don't see why any losses that came after that could not be deducted as he is now gambling with his own money. Quote Link to comment Share on other sites More sharing options...
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