Question

Hortencia is employed as an accountant for a large firm in San Diego. For relaxation she...

Hortencia is employed as an accountant for a large firm in San Diego. For relaxation she likes to go to a nearby casino and play in blackjack tournaments. During 2018, she incurred $6,750 in gambling losses and $5,470 in gambling winnings.

Hortencia plans to itemize her deductions in 2018 because she purchased a home this year and has mortgage interest expense; what amount could she claim on her return for other itemized deductions for the year?

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Answer #1

As per IRS Gambling winnings are fully taxable and must be reported on income tax return. All gambling income must report under "other income" on form 1040.

On the other side gambling losses can be deduct when individual itemize their deduction on form 1040 and kept record of all the winning and losses from gambling the losses amount can not be more than the winning amount reported on tax return for the deduction.

Gambling losses deduction record under "other itemized deduction"

So on the above case only $5470 can be deducted for the year.

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