Site Loader

The Internal Revenue Service (IRS) has historically required gambling winnings and losses to be accounted for separately. The reason for this has to do with the way gambling losses are deducted for tax purposes. Gambling losses are treated as an itemized deduction and are reported on Schedule A of the personal income tax return (Form 1040). This creates a problem in cases where UFABET taxpayers cannot itemize (such as when a standard deduction is higher) or where the taxpayer’s income exceeds a certain threshold (in which case the taxpayer loses part of their deduction detailed through phasing out). . In such cases, the taxpayer does not get the full benefit of the game losses to offset the game winnings. What the IRS is really looking for is reporting and taxes on gross gambling winnings.

New fiscal rule:
According to a recent tax court case (Shollengerger, TC Memo 2009-36) taxpayers can earn net gambling winnings on any given day with gambling losses. This is a significant setback for the IRS. As an example, imagine if you won $ 2,000 in the morning at a casino and lost $ 900 later that afternoon. Before this court case, the IRS would require you to report the $ 2,000 in gambling winnings and then separately itemize the $ 900 in gambling losses on your tax return. Instead, the court ruled that the taxpayer in this case was allowed to take the net gambling winnings for the day and report $ 1,100 as net gambling winnings instead of the gross amount of $ 2,000, the IRS ordered. The court went on to assert that this “compensation rule” only applied on a daily basis. It stated that a taxpayer could not make net gains and losses from gambling for the entire year.

Regardless of this change in the reporting and taxation of gambling activities, there are specific accounting requirements for gambling activities. The IRS requires taxpayers to keep a journal or ledger of all gambling activities. This tax accounting requires the taxpayer to record the following information on various gambling activities:
1. Type of gambling activity
2. Location of gambling activity
3. Amounts gained and lost for each activity
4. Number of games played
5. Cost of purchased bingo cards
6. Winnings for each Bingo card
7. Copies of Keno tickets validated by the gambling establishment.
8. Copies of casino credit reports.
9. Copies of casino check cashing records
10. Records of the number of races wagered on (horse, harness, dog)
11. Amount of race bets
12. Amount of winnings and losses in races
13. Registering the slot machine number
14. Record of slot machine winnings by date and time per machine
15. Number of table played (blackjack, dice and roulette)

16. Table of credit card data, including where the credit was issued.

All of the above items can be supplemented with receipts, tickets, etc.


Leave a Reply

Your email address will not be published. Required fields are marked *