Gambling Losses Not Deducted

[zeros]

New client came in and was wondering about some gambling losses. AARP prepared his 2013 return and claimed $12,000 in winning and losses of $10,500. The AARP preparer said it was not good to claim the same amount for both winnings and losses. He thinks he would want the return amended to claim the remainder of allowed losses. He showed me a slip from the casino with $35,000 in losses. Anybody know why the preparer would think this way?

[JohnH]

The preparer isn't really thinking - only making wild assumptions and costing the client money by running scared over a silly speculation. My guess is that the only thing he knows less about than gambling would be auditing.

[jimmcg]

Ignorance

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[JohnH]

which post?

[New York Enrolled Agent]

The preparer isn't really thinking - only making wild assumptions and costing the client money by running scared over a silly speculation. My guess is that the only thing he knows less about than gambling would be auditing.

None of us were there so we don't know what the real conversation was.

Taxpayers usually forget they had gambling winnings when there are no W-2G forms. I presume this taxpayer had at least 1 W-2G. Perhaps the preparer suggested that the taxpayer really had more winnings than simply the amount on the W-2G form (isn't that always the case?). As I said, we really don't know what transpired. I would suggest that a taxpayer who has $35K in losses probably has more than $12K in winnings. Do you think that's a fair assumption?

I can see the explanation on a 1040X. "I lied about my winnings - I now want to come clean so I can take more losses." Maybe, it is best to let sleeping dogs lie.

[taxea]

the preparer must have been taking a potty break when gambling income/loss was being taught.