Gambling losses

[LCP]

A couple years ago I was at a CPE seminar. There was a break-out session devoted entirely to a new ruling whereby a gambler could consider an entire day of playing the slots as being a taxable event.

The upshot was that you could report the net gain or loss of that event as taxable income instead of reporting the jackpot as income and the losses as an itemized deduction.

Now I can't find anything on it.

Anybody??

[mastertaxguy]

"Session Gambling Losses"

The issue is session gambling losses or gains: what did the gambler lose, or gain/win, during a particular session.

See Schollenberger, TC Memo 2009-306, IRS Chief Counsel Advice 2008-011 (12-5-2008).
Our Favorite Tax Book p 3-20 has a summary of these rules.

The problem usually is lack of record keeping by the taxpayer/client. Also if do this you need to include the "session winnings" that may occur from time to time.

[RLymanC]

Gambling winnings/Losses

I've talked to the Indian casinos and IRS.

If you put $1,500 dollars into a slot machine and win $1,500, then loose $1,500, you have $1,500 gambling winnings. not zero winnings.

[New York Enrolled Agent]

I've talked to the Indian casinos and IRS.

If you put $1,500 dollars into a slot machine and win $1,500, then loose $1,500, you have $1,500 gambling winnings. not zero winnings.

Well I'm glad you talked to various folks but to be honest I think you'd be much better off READING what mastertaxguy cited. Go to the irs site - type AM 2008-011 in the search box and you'll get an answer that suggests something to the contrary of what you opined.

A snip: [Likewise, a casual gambler who enters a casino with $100 and loses the entire amount after playing the slot machines has a wagering loss of $100, even though the casual gambler may have had winning spins of $1,000 and losing spins of $1,100 during the course of play.]

[taxea]

Unless this was a competition of some sort according to the casino mgmt. I spoke with each pull of the handle is a separate game.

[DexEA]

Unless this was a competition of some sort according to the casino mgmt. I spoke with each pull of the handle is a separate game.

IRS trumps Casino Mgmt

[JohnH]

Is there any possibility that casino management has any incentive to figure out what you want to hear and then say that to you? ( Especially since their agenda has nothing to do with accurate tax reporting )

[LCP]

Is there any possibility that casino management has any incentive to figure out what you want to hear and then say that to you? ( Especially since their agenda has nothing to do with accurate tax reporting )

They are probably trying to justify/explain why a 1099 is necessary to someone who had already lost a bundle that day.

[taxea]

Casinos provide a win/loss statement on request by the TP. It is imperative that the TP use a casino card for each play.

[mastertaxguy]

PROPOSED IRS GAMBLING SAFE HARBOR-Notice 2015-21

Casinos provide a win/loss statement on request by the TP. It is imperative that the TP use a casino card for each play.

1. IRS has proposed a revenue procedure further defining "session losses/winnings/activities" and proposing a safe harbor.
2. IRS notice 2015-21, released today (3-3-15) lays out the IRS thinking on this issue and includes 7 examples.
3. One thing IRS is proposing is to end any session at 11:59 p.m. local time and start another at 12:00 a.m. (Midnight).
4. The proposed procedure recognizes the growth of electronically tracked slot machine play and "player's cards and ticket."
5. It seems worth the read at this stage of the filing season and, at least for me, application going forward in our practice.
6. This particular thread has been quiet for a while.
7. I do disagree with those relying on casino "win/loss" statements as those provided taxpayer seldom on detailed unlike those IRS gets with as summons.
8. Keep in mind that session gambling may result in gains for particular session(s) which have to stand alone and cannot be netted, at least on line 21, with other session gains.
9. Session gains need to be reported even in the absence of W2G's being issued.
10. My primary state of practice does not have separate rules on gambling: I am aware that some states, like Minnesota, have in the past had court decisions finding a taxpayer to be classified as a professional gambler even though IRS has made a contrary determination. I don't know if such logic would apply to session gambling.