Tax/Win Loss Statement Question

I have a question as I recently won $2,000 on a Dbl Dbl Bonus poker machine. I have been told that you can get a win/loss statement from casinos using your players card. If I show $2,000 played is that suffient to avoid paying taxes at the end of the year ? Thanks for your responses in advance.

 

The short answer is no, a win loss statement is not enough. You need detailed records of play if you want to use losses to cancel wins.

 

it's not $2k played, it's $2k lost required to offset the win. for example if you hit that one and got a $2k w2-g, but lost it all back over the rest of the trip, then you can claim those losses to offset the win. but if you ended up taking home $1500, you can only claim $500 in losses. of course, if you go back later this year and lose more, you can claim the rest of the losses up to the $2k.

however, a win/loss statement from the casino is not necessary nor is it particularly useful as the IRS doesn't accept them as "proof" of loss since they are potentially inaccurate. if you are audited, they will want to see detailed records about where you played and when and what you won/lost in each session. of course, if you're not audited, it doesn't matter if you have any records.

 

I've seen some debate on this board and elsewhere on whether a win/loss statement is or isn't sufficient. I would love to see something that made me confident in beleiving one way or another as I'm hoping some day to need to know that answer.

 

If you want proof, call your accountant. If you want opinions, keep reading the boards.

 

Would losing Sports betting and or horse racing tickets work ?

 

That most likely is the best advice. : )

 

I have been around on this board and others for 10 years now and on a lot of different websites and in books about gambling I have read quite a bit about what the IRS wants/needs as far as records for gambling wins and losses - how much detail they want, what they need to know, etc...

But I have never talked to anybody or even heard of somebody that actually had to provide such a detailed log for taxation purposes and nor in the casinos have I ever seen anybody actually making such meticulous records that have been suggested are needed.

 

Nobody said you had to make honest detailed records

 

I know people that do, absolutely. if you feed 100s into the $50 and $100 slots like there's no tomorrow 10 hours a day for several trips a year, you're going to have hundreds of w2-gs. when you offset those, you're pretty much guaranteed to get audited and if you want to make sure you're covered, you keep a log. not every time you spin, just at the end of each session when you go back up to your room you write down how long you played, what you played and amount won/lost. then you just give that diary to your accountant at the end of the year and you're covered.

 

I've lost faith with the "experts". Everybody says "ask and accountant" or "ask a lawyer" when a question like this comes up and the truth of the matter is I can ask 10 of any expert and get 10 different answers. If you don't believe me, take your dog to 10 different vets and see if they all agree on what the tests tell them. I've found this particularly true with accountants and lawyers. When I find someone who really knows their stuff (and this doesn't happen often) I try to stick with them, but untill then I'm left floundering.

There is a phenomenon however (sorry, can't remember the term for it) where if you poll a group of people on the number of jelly beans in a jar you will find that the average of the guesses will end up being very close to the answer. The larger the number of people polled the more likely you are to be close to the right answer. That's kinda how I view opinions on the internet and use them as a guide, not as gospel.

What I'd really like to hear about is someone who got audited and tried to use a win/loss statement as proof and whether or not it was accepted by the IRS. Of course then I'd have to decide if they were full of crap or not :evillaugh

It's hard being a cynic

 

You're missing my point. I didn't say call AN accountant, I said call YOUR accountant. Because YOUR accountant is the definitive answer...because when you file, his name's going on the return too, so if he says it's right, then it's right.

 

I am also cynical and totally agree that you will get different answers from different (So Called) experts. Being that this was my first win of over $1200 I was hoping (what a fool I am) that I would get 90-100% agreement that this is what you need to do.
Here is a perfect example of people not agreeing: When I won my local casino indicated I needed a SS card, Passport or Military ID to pay me. Of course I don't carry any of these with me and asked why those were needed. The Casino Manager indicated it is a new federal law. My buddy in a neighboring state was present a couple days ago at an OTB where those documents were not required to make a payment over $1,200. They did however ask for the person's SS # to pay them. One law and two different takes on what is needed.

 

I will conceed that as you state it that is an excellent point!

Problem is I have no accountant. I'm way to low roller for one but I would like a tax person I can trust (and as I stated when I find one I will stick with them). The problem is that I have good taste and whenever I find a professional I like they get promoted or find a better job (because they are that good). My last tax guy was a tax lawyer so he was the one to actually represent me were I to get audited. Then he went to work for the state and I got stuck with his assistant who I think still hasn't joined the 1980's and does all tax prep on a monochrome green screen computer. I can't even email her my spreadsheets because she doesn't do email...lol. So now its just me and TurboTax

I'm like that guy on the H&R block commercial where the wife asks him if he asked the TurboTax box for help.

 

This should provide the necessary detail and comfort level

Directly off the IRS website:

It is important to keep an accurate diary or similar record of your gambling winnings and losses. To deduct your losses, you must be able to provide receipts, tickets, statements or other records that show the amount of both your winnings and losses. Refer to Publication 529, Miscellaneous Deductions, for more information.

Diary of winnings and losses. You must keep an accurate diary or similar record of your losses and winnings.

Your diary should contain at least the following information.

The date and type of your specific wager or wagering activity.

The name and address or location of the gambling establishment.

The names of other persons present with you at the gambling establishment.

The amount(s) you won or lost.

Proof of winnings and losses.

In addition to your diary, you should also have other documentation. You can generally prove your winnings and losses through Form W-2G, Certain Gambling Winnings, Form 5754, Statement by Person(s) Receiving Gambling Winnings, wagering tickets, canceled checks, substitute checks, credit records, bank withdrawals, and statements of actual winnings or payment slips provided to you by the gambling establishment.

For specific wagering transactions, you can use the following items to support your winnings and losses.

These recordkeeping suggestions are intended as general guidelines to help you establish your winnings and losses. They are not all-inclusive. Your tax liability depends on your particular facts and circumstances.

Keno. Copies of the keno tickets you purchased that were validated by the gambling establishment, copies of your casino credit records, and copies of your casino check cashing records.

Slot machines. A record of the machine number and all winnings by date and time the machine was played.

Table games (twenty-one (blackjack), craps, poker, baccarat, roulette, wheel of fortune, etc.). The number of the table at which you were playing. Casino credit card data indicating whether the credit was issued in the pit or at the cashier's cage.

Bingo. A record of the number of games played, cost of tickets purchased, and amounts collected on winning tickets. Supplemental records include any receipts from the casino, parlor, etc.

Racing (horse, harness, dog, etc.). A record of the races, amounts of wagers, amounts collected on winning tickets, and amounts lost on losing tickets. Supplemental records include unredeemed tickets and payment records from the racetrack.

Lotteries. A record of ticket purchases, dates, winnings, and losses. Supplemental records include unredeemed tickets, payment slips, and winnings statements.

 

Step 1: Enter the $2,000 on Form 1040, Page 1, Line 21 with the description "Gambling Winnings"

Step 2: Enter the $2,000 on Schedule A, Line 28 with the description "Gambling Losses"

Step 3: Make an Excel spreadsheet with the following:

#1 slot machine # or table # from the casino where you lost.
#2 time and a date
#3 total amount you lost
#4 casino name and address
#5 names of anyone else with you
#6 make a copy of your bank withdrawal receipt, ATM receipt, canceled check, monthly statement or whatever other record you have showing how you got the cash out to gamble when you lost.

Step 4: When you print a copy of your return for your records, print out that excel sheet and attach it to you return with copies of checks, receipts, etc.

 

Thanks Bee Jay this is very helpful. Thank you all for your input.

 

no prob, I did another post spelling out exactly what you need to do without all the info that doesn't apply to your situation.

 

The issue with this for a lot of people is going to be step #2. Because schedule A is for itemizing deductions. A lot of people are going to find that itemizing, even with a $2000 gambling loss, is not as beneficial as taking the standard deduction. This is especially true if you don't own a house.

If you already itemize because you have lots of medical expenses, charity contributions, or mortgage interest, then no problem. But itemizing simply to get a $2000 deduction might actually be costing you money.

 

Good point, yeah if you don't itemize you are somewhat fucked for gambling losses. You are only left with high-risk or high-cost options.

I guess it is easy me to forget that people in low tax states don't pay more than the standard deduction in state taxes alone.