shadroch said:
Anyone can deduct their losses from their winnings. ..
Well, here's what I think.
Nothing on you Rock - you were just last post.
Ever notice when you put $1 in a slot machine and hit for $1200?
Here comes a W-2G, or 1099-something for $1200 of taxable income.
In reality, your net win is $1199, isn't it? If one can automatically offset losses vs winnings why must one report $1200 of taxable income as income?
If Uncle Sam could stand behind you, he would want to include each and every winning BJ hand in income. One has bet after-tax dollars and produced income with those after-tax dollars just as one might have by buying a stock, after all. One has "invested" in a BJ game. The $1200 is arbitrary and just for balancing when paperwork is worth reality.
If BJ is not your living, yes, one can offset losses vs winings but only on Sch A if one can itemize deductions. I forget if it's in the Misc section subject to a 2% of AGI or not.
If one cannot itemize, one is SOL and must pay tax on the, say, $1200.
How do you think these high-limit slot players feel, say, at a $100 min slot machine, feel at the end of the year when they have generated perhaps hundreds of W-2G's (one for each indiv win of $1200 or more) yet, most likely, playing slots afer all, have probably lost money?
They must include all the W-2 G's in income and pay taxes on it. And, you know, I think there was some kind of "surtax" on total income this year so these guys are really screwed once it hits, I think, a million or so? Which for a $100 min slot player can easily happen.
Whatever, gambling losses are only deductible on Sch A, unless one is a professional, as best I understand it.
Any of you accounting guys out there have an opinion one way or the other? Maybe Aslan? Maybe Auto Monk?