Can recreational players in USA offset winnings with proven losses?

**Foxx** · 07-12-21, 04:40 PM

As noted several times in this thread, it is correct that as a recreational player you can itemize your losses up to the amount of winnings on a federal level. It can wreak havoc on your return though as it forces you to itemize. Also, it can jack up your Adjusted Gross Income and phase you out of certain benefits. There is a handful of states that do not allow gambling losses as itemized deductions and/or have other rules that have the gambling income treated different on a state level. Perhaps Mike's issue was on the state level.

**thomorino** · 07-12-21, 04:45 PM

Originally posted by chico2663

Wrong. You can’t claim losers without having winnings.

You missed the point. If you don’t have any income from gambling, positive winnings, you owe no taxes.

Offsetting wins with losses presumes and requires the individual or individuals to have a net positive income from gambling, offset provisions is for offsetting taxes, if you have no income you aren’t paying taxes.

**thomorino** · 07-12-21, 04:49 PM

The whole idea of offsetting wins with losses requires you to be net positive and to be making income from gambling. You pay taxes on income not bets you win.

Its no different than a trader who has winning and losing trades or an investor with winning and losing investments trying to offset capital gains taxes.

In the us you can use an investment loss to offset capital gains taxes for up to 3 years. Although it doesn’t apply to me I’d like to see the same thing for gambling wins and losses.

**RudyRuetigger** · 07-12-21, 04:50 PM

Originally posted by jjgold

Rusty you made a 10 G bet with Mike??

I do not think he ever confirmed the wager

I might void it

i confirmed he

he offered

it is FINAL

**thomorino** · 07-12-21, 04:52 PM

Every legal book in Pennsylvania shows your year to date winnings and income, it is very easy to quickly pull up.

**BeatTheJerk** · 07-12-21, 04:56 PM

Originally posted by thomorino

Every legal book in Pennsylvania shows your year to date winnings and income, it is very easy to quickly pull up.

How much money did you win last calendar year thomorino ?

**mem5757** · 07-12-21, 05:08 PM

Originally posted by thomorino

The whole idea of offsetting wins with losses requires you to be net positive and to be making income from gambling. You pay taxes on income not bets you win.

Its no different than a trader who has winning and losing trades or an investor with winning and losing investments trying to offset capital gains taxes.

In the us you can use an investment loss to offset capital gains taxes for up to 3 years. Although it doesn’t apply to me I’d like to see the same thing for gambling wins and losses.

the bolded is not necessarily true at all. you can only offset gambling winnings if you itemize. if you take standard deduction which most people do and you have gambling winnings that are less than the standard deduction (12k for single person) then there is no way to offset the wins. a while back around 2014 i hit a number on electronic roulette machine for around $1500 which triggered W2 from the casino, even though i had way more than $1500 in gambling losses that year, i had no way to offset the win since i took the standard deduction, so i had to pay the irs taxes on that $1500. If i had made the $1500 on a stock trade, i would have been able to offset that with my losing trades, since stock brokers only issue 1099 form for NET gains at the end of the year. Casino issue W2 form on all slots and electronic machine wins over 1200, BIG difference.

**thomorino** · 07-12-21, 05:12 PM

Originally posted by mem5757

the bolded is not necessarily true at all. you can only offset gambling winnings if you itemize. if you take standard deduction which most people do and you have gambling winnings that are less than the standard deduction (12k for single person) then there is no way to offset the wins. a while back around 2014 i hit a number on electronic roulette machine for around $1500 which triggered W2 from the casino, even though i had way more than $1500 in gambling losses that year, i had no way to offset the win since i took the standard deduction, so i had to pay the irs taxes on that $1500. If i had made the $1500 on a stock trade, i would have been able to offset that with my losing trades, since stock brokers only issue 1099 form for NET gains at the end of the year. Casino issue W2 form on all slots and electronic machine wins over 1200, BIG difference.

If your not making enough money to take more than the standard 5k deduction than you probably could get away with just not reporting the gambling income.

You missed my point though, all I’m saying is if you don’t make any money gambling you have no gambling income, the government taxes income not winnings, obviously you can win bets but still have no gambling income.

**jjgold** · 07-12-21, 05:13 PM

Play Offshore or with locals

**Foxx** · 07-12-21, 05:16 PM

Originally posted by thomorino

obviously you can win bets but still have no gambling income.

This statement is incorrect from a tax law perspective.

**thomorino** · 07-12-21, 05:18 PM

Originally posted by Foxx

This statement is incorrect from a tax law perspective.

No, it’s not wrong. If you win a 10k bet than lose a 100k bet you have a net lose and no income so you owe no taxes.

This is why people pay taxes at the end of the year, not weekly or monthly.

**thomorino** · 07-12-21, 05:20 PM

There are 2 separate conversations here that are being conflated.

Thebfirst is offsetting tax liability on income by using losses and the second is whether you owe taxes on gambling winnings if you lose more money than you make gambling.

Again, the government has an income tax not a gambling tax, no income then no taxes.

**mem5757** · 07-12-21, 05:21 PM

Originally posted by thomorino

If your not making enough money to take more than the standard 5k deduction than you probably could get away with just not reporting the gambling income.

You missed my point though, all I’m saying is if you don’t make any money gambling you have no gambling income, the government taxes income not winnings, obviously you can win bets but still have no gambling income.

it has nothing to do with what you report, it's about what the casino reports. If the casino issues you a W2 for $2000, they are also sending that same W2 to the IRS. You can't get away with not reporting it.

**Foxx** · 07-12-21, 05:23 PM

Originally posted by thomorino

No, it’s not wrong. If you win a 10k bet than lose a 100k bet you have a net lose and no income so you owe no taxes.

This is why people pay taxes at the end of the year, not weekly or monthly.

In that scenario, you have 10k in gambling income. You are welcome to itemize 10k of the 100k gambling losses as an itemized deduction.

**thomorino** · 07-12-21, 05:23 PM

Originally posted by mem5757

it has nothing to do with what you report, it's about what the casino reports. If the casino issues you a W2 for $2000, they are also sending that same W2 to the IRS. You can't get away with not reporting it.

Obviously I am talking about gambling winnings that aren’t reported to the government.

**thomorino** · 07-12-21, 05:24 PM

Originally posted by Foxx

In that scenario, you have 10k in gambling income. You are welcome to itemize 10k of the 100k gambling losses as an itemized deduction.

No, income is money made after losses are subtracted. There is a difference between income and winnings.

**Foxx** · 07-12-21, 05:33 PM

Originally posted by thomorino

No, income is money made after losses are subtracted. There is a difference between income and winnings.

I don't know what to tell you other than that you are wrong, but that seems to come naturally for you.

**mem5757** · 07-12-21, 05:35 PM

Originally posted by thomorino

Obviously I am talking about gambling winnings that aren’t reported to the government.

so we are talking about paying taxes on offshore sites now? lol seems pretty pointless to discuss that.

**SamsNCharge99** · 07-12-21, 05:37 PM

Congrats rudy on the win

be careful when reporting it though

**thomorino** · 07-12-21, 05:40 PM

Originally posted by Foxx

I don't know what to tell you other than that you are wrong, but that seems to come naturally for you.

No you are wrong, you dumb shit.

**thomorino** · 07-12-21, 05:41 PM

Originally posted by Foxx

In that scenario, you have 10k in gambling income. You are welcome to itemize 10k of the 100k gambling losses as an itemized deduction.

If you lost more money than you make your income is negative and you owe no taxes.

**Foxx** · 07-12-21, 05:47 PM

Originally posted by thomorino

If you lost more money than you make your income is negative and you owe no taxes.

It's a little more complicated than that as winning bets count towards AGI and losing bets need to be itemized as a deduction. That's if you are going to correctly report. It's stupid and it sucks. Do whatever the fuk you want to though, it only really matters if you get audited.

**thomorino** · 07-12-21, 05:54 PM

Originally posted by Foxx

It's a little more complicated than that as winning bets count towards AGI and losing bets need to be itemized as a deduction. That's if you are going to correctly report. It's stupid and it sucks. Do whatever the fuk you want to though, it only really matters if you get audited.

The feds aren’t interested in people with no income, they are interested in people under reporting income or not paying sufficient taxes on their reported income, they aren’t going to bother people with no gambling income unless they have reason to believe you are lying.

**GzaTheGenius** · 07-12-21, 06:02 PM

Yes, obviously.. if there are records it is legit

**pavyracer** · 07-12-21, 06:05 PM

morino is an expert on gambling losses. he has 10 threads with multiple sports all losing between 50 to 100 units each.

**thomorino** · 07-12-21, 06:07 PM

Originally posted by pavyracer

morino is an expert on gambling losses. he has 10 threads with multiple sports all losing between 50 to 100 units each.

Wrong, you are a dumb shit.

**Roger T. Bannon** · 07-12-21, 06:23 PM

I've only gotten a 1099 from Predict It and they reported the amount of my winnings. So if I had losses, I would have no way of reporting them.

I would assume DraftKings or a sportsbook will probably net out deposits from winnings and report your winnings so those will have to be reported. I don't know how you could report losses since you do not report gambling winnings and losses as you do with stocks.

If you are filing as a professional, you can report your total profits which would include that.

I think pimike is basically right here. You can't report your losses as a small-time gambler. You are going to have your winnings reported and if you do not report that amount, you might get questioned. I don't see how you could avoid it. Fortunately, for most gamblers this is not an issue to worry about.

**thomorino** · 07-12-21, 06:31 PM

Originally posted by Roger T. Bannon

I've only gotten a 1099 from Predict It and they reported the amount of my winnings. So if I had losses, I would have no way of reporting them.

I would assume DraftKings or a sportsbook will probably net out deposits from winnings and report your winnings so those will have to be reported. I don't know how you could report losses since you do not report gambling winnings and losses as you do with stocks.

If you are filing as a professional, you can report your total profits which would include that.

I think pimike is basically right here. You can't report your losses as a small-time gambler. You are going to have your winnings reported and if you do not report that amount, you might get questioned. I don't see how you could avoid it. Fortunately, for most gamblers this is not an issue to worry about.

There is no reason a small time gambler would need to report losses since there would be close to a zero chance their losses would exceed 5k.

**Roger T. Bannon** · 07-12-21, 06:34 PM

Originally posted by thomorino

There is no reason a small time gambler would need to report losses since there would be close to a zero chance their losses would exceed 5k.

That's not true. If I win $1,000 from Draft Kings but I lose $3,000 at other books, I am down but have to pay taxes. That stinks. That is something I have thought about with US gambling. The taxes are really not in your favor.

**5mike5** · 07-12-21, 06:38 PM

Originally posted by Roger T. Bannon

That's not true. If I win $1,000 from Draft Kings but I lose $3,000 at other books, I am down but have to pay taxes. That stinks. That is something I have thought about with US gambling. The taxes are really not in your favor.

cant you just request your yearly statement if you were down at 1 book? they all have to keep your yearly W/L (You can pull this up at anytime btw) and obv winners get it for sure in the mail anyways...Im not sure thats just another question...Ive been wondering about what I should be holding out but no idea...Have no state income taxes so thats no issue

**Roger T. Bannon** · 07-12-21, 06:40 PM

With gambling winnings, you have been on the honor system in the past. Usually a person would have a big net win that they would have to report. I think you probably could offset your losses against your winnings but it would be hard to prove. The problem is the 1099. If you did not report the full amount, you could probably write a letter to the IRS explaining that you offset losses from gambling and they might let it slide but the tax form is going to put you in a disadvantageous position.

**RudyRuetigger** · 07-12-21, 06:42 PM

Originally posted by Roger T. Bannon

That's not true. If I win $1,000 from Draft Kings but I lose $3,000 at other books, I am down but have to pay taxes. That stinks. That is something I have thought about with US gambling. The taxes are really not in your favor.

There is no way that is true

That's what I made the thread about????

A couple guys here seem to know their shit

**thomorino** · 07-12-21, 06:43 PM

Originally posted by Roger T. Bannon

That's not true. If I win $1,000 from Draft Kings but I lose $3,000 at other books, I am down but have to pay taxes. That stinks. That is something I have thought about with US gambling. The taxes are really not in your favor.

No, your statement is wrong at multiple levels. If you lost 3k gambling and made 1k you wouldn’t owe federal income tax because of standardized deductions and a net loss.

**thomorino** · 07-12-21, 06:44 PM

Originally posted by 5mike5

cant you just request your yearly statement if you were down at 1 book? they all have to keep your yearly W/L (You can pull this up at anytime btw) and obv winners get it for sure in the mail anyways...Im not sure thats just another question...Ive been wondering about what I should be holding out but no idea...Have no state income taxes so thats no issue

Yes all Pennsylvania books track win and losses and they are easy to pull up, he doesn’t know what he’s talking about.

**Roger T. Bannon** · 07-12-21, 06:45 PM

Originally posted by RudyRuetigger

There is no way that is true

That's what I made the thread about????

I think technically you can offset. The problem is that you are only getting 1099s for winnings. So when you have losses, they are taking your word for it. So you get a 1099 for $1,000 in winnings and you don't report it, you get a letter from them and they start charging you 6% interest on the shortfall. Now you have to file an explanation and maybe they take your word for it or maybe they make you pay it.