Bad News for Gamblers

[Lee B]

Under the OBBB, only 90% of gambling losses will be deductible.

I'm sure there are other tax tidbits that will pop up.

[kathyc2]

Twitter was abuzz about that yesterday.  Some guy was going on why if he won 400K but lost 500K why he now has to pay tax on the 40K.  He didn't like my answer that it's a stupidity tax on people that throw away money gambling. 

[Catherine]

6 hours ago, kathyc2 said:

He didn't like my answer that it's a stupidity tax on people that throw away money gambling. 

Yeah, in general people don't like truth that makes them question their poor choices. 

[kathyc2]

Clarification on this:  They can still take 100% deduction of winning as long as losses are are 11% higher than winnings.  

“(1) IN GENERAL.—For purposes of losses from wagering transactions, the amount allowed as a deduction for any taxable year—

“(A) shall be equal to 90 percent of the amount of such losses during such taxable year, and

“(B) shall be allowed only to the extent of the gains from such transactions during such taxable year.

“(2) SPECIAL RULE.—For purposes of paragraph (1), the term ‘losses from wagering transactions’ includes any deduction otherwise allowable under this chapter incurred in carrying on any wagering transaction.”.

(b) Effective date.—The amendment made by this section shall apply to taxable years beginning after December 31, 2025.

[JohnH]

So they have 6 months to reflect upon their bad choices and change their behavior before the new rules take effect?